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Ethereum Price Shies Away From $20K as Markets Brood Over Potential Interest Rate Hikes

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Ethereum price plunged on Wednesday as rumors of a potential Fed interest rate hike curb the asset’s gains. At the time of writing, the altcoin had plunged 6.14% to $1,973.26. Ethereum’s total market cap has dropped by more than 5% over the last day to $236 billion, while the total volume of the coin traded jumped by nearly 52%.

Fundamentals

The global crypto market was in the red on Wednesday as markets price in an 86% chance of the Federal Reserve hiking interest rates. The largest coins, Bitcoin and Ether, led the losses in the market, lowering the overall sentiment in the crypto market. Bitcoin price fell by more than 3%, changing hands at $29,000.

Ethereum price dropped sharply below the important level of $2,000, following a 12% rally over last week that pushed it to its highest since August 2022. The drop in crypto prices comes in the wake of the uncertainty around the outlook of the Fed’s monetary policy meeting later in May and a stronger dollar.

Atlanta Fed President Raphael Bostic said that he anticipates a 25-basis point interest rate hike in May and then a hold. St Louis Federal Reserve President James Bullard also said that he favors a higher terminal rate of between 5.50% and 5.75%. In Europe, European Central Bank officials have become jittery about inflation and suggested further interest rate hikes.

Markets were brooding on the latest UK inflation data earlier on Wednesday, which showed that consumer prices rose 10.1% over the 12 months to March, down from 10.4% in February but ahead of consensus estimates of a 9.8% increase. This has fueled expectations that the Bank of England (BoE) could further hike its interest rates in its next monetary policy meeting.

The US dollar strengthened on fears of a looming interest rate hike by the Federal Reserve. A strengthening dollar could hurt risk assets such as cryptocurrencies, as many investors tend to shift to traditional financial institutions. US Treasury yields also ticked higher on Wednesday, with the yield on the 10-year Treasury inching higher to 3.606% and the 2-year Treasury rising to 4.268%.

Ethereum Price Analysis

Ethereum price wiped gains from its previous trading session, dropping below the important $2,000 level. Ethereum continues to trade above the 50-day and 100-day moving averages, as well as the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has declined sharply to the neutral zone.

As such, I expect the Ethereum price to continue finding support above the $1,900 level in the short term. A drop below the level will have bears eyeing the next logical support level at $1,805.40. However, a breach of the $2,000 level might push the ETH price to its 10-month high of $2,150.

ETH Price Chart

Altcoins

Solana Price Surges Beyond $100, Dethroning Ripple and BNB To Secure Fourth Place

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Solana price performance in recent times has been remarkable, surpassing Ripple and Binance Coin to become the fourth-largest cryptocurrency by market cap. The SOL price breached the critical level of $100 for the first time since April 2022 over the weekend to imbue optimism among investors. However, the altcoin has corrected by 7%, suggesting that the market is overheated. At the time of writing, the ‘Ethereum killer’ was trading slightly lower at $111.60.

SOL Outlook

Solana price has made a significant recovery over the past few weeks, climbing above the psychological level of $100. The altcoin has been one of the best-performing assets this year, extending its year-to-date gains to more than 1,025%, with more gains recorded in the past month alone. However, even with such growth, analysts have noted that Solana has a bleak chance of topping its ATH of $260.

The reason behind this is the increase in supply relative to its value. In November 2021, when the Solana price hit its all-time high of $260, its total market capitalization was around $78 billion. Despite the value of the crypto asset being less than half of what it was at the top, its market cap is currently hovering near $50 billion.

This has been brought about by the increase in the Solana supply by more than 100 million SOL over the past two years. According to some analysts, for the altcoin to retest $260, its…

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Altcoins

Solana Price Skyrockets to 20-Month Peak Amidst Memecoin Frenzy

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Solana price has noted significant gains over the past few weeks, climbing to its highest level since April 2022. The ‘Ethereum Killer’ almost topped the crucial level of $100 on Friday, before pulling back slightly. The asset’s recent surge has catapulted Solana’s total market cap to $39.6 billion, ranking 5th after and above BNB and XRP, respectively. Solana has jumped by more than 22% in the past week and more than 80% in the month to date. At the time of writing, SOL price was trading 0.90% lower at $93.10.

Catalysts Behind SOL’s Rally

Solana price has been on a strong bull run over the past few days, rocketing to its highest level in 20 months as the network benefits from the substantial activity and strong interest in memecoins. The SOL token, the native digital asset of the high-performance blockchain platform Solana, has shown some serious strength over the past few weeks, outperforming all the altcoins in the market.

The recent surge in the Solana price has been linked to heightened on-chain activities on the Solana blockchain. Notably, the ongoing hype for the blockchain’s speedy transactions, cheap fees, and a lottery of meme coin issuances has buoyed SOL’s on-chain activity. Metrics have revealed that Solana has been the strongest draw among on-chain traders, with trading volumes and network fees outperforming Ethereum- the largest altcoin by market cap.

Cited figures provided by DeFi aggregator DeFiLlama

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Altcoins

Solana Price Breaches $60 Amid a Symphony of Bullish Indicators

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Solana price has jumped more than 8% over the past week, breaching the important level of $60. At the time of writing, Solana was trading 3% higher at $61.07. The asset’s total market cap has climbed to $25.9 billion over the past week, ranking it the 6th largest cryptocurrency after XRP. The total volume of SOL traded over the last day has declined by 8%.

SOL’s Bullish Cues

Solana’s price has been among the best-performing cryptocurrencies this year amid continuous growth. The “Ethereum killer” has consistently impressed investors throughout the year on the back of a resurgence in bullishness, which saw SOL’s price climb more than 513% in the year to date. Institutional investors have also shared the bullish sentiment, making Solana their most preferred altcoin.

In the week ending November 24, Solana recorded inflows worth nearly $3.5 million, significantly more than the other altcoins’ inflows combined. The asset’s monthly inflows were higher at $40.2 million, lower than Ethereum’s $99.6 million inflows in the same period. Other altcoins, including Litecoin and Ethereum, noted significant outflows, making Solana nearly half of the home for DeFi. This implies that when it comes to institutions, Solana is currently the best-performing altcoin with the potential of a long-term rally much higher than other digital assets.

Notably, the Solana DeFi ecosystem accomplished a significant milestone earlier this week. Its Total Value Locked (TVL) hit a new yearly peak of over $655 million,…

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