Solana remains above $230 with a slowdown in the bullish trend ahead of the Federal Reserve's decision on interest rates on Wednesday.
Pantera Capital CEO Dan Morehead confirmed that the company has exposure of $1.1 billion to Sol.
Morehead says that Solana is the fastest blockchain, outperforming Bitcoin over the past four years.
Solana ($SOL ) dropped about 6% from its peak of $250 last week, trading above $235 at the time of this report on Tuesday. The smart contract token tested the support level at $230 the previous day, but increasing institutional interest limits downside risks.
Meanwhile, participants in the broader cryptocurrency market have turned their attention to the U.S. Federal Reserve's (Fed) interest rate decision expected on Wednesday.
The CME Group's FedWatch tool shows that market participants support a 96% probability of the Fed lowering interest rates to a range of 4.00% to 4.25%. The remainder of the market participants are looking for a 50 basis point cut.
Low interest rates often encourage investment in riskier asset classes, such as cryptocurrencies and stocks. Therefore, low prices may bolster investor interest in digital assets in the fourth quarter.
FedWatch Tool | Source: CME Group
The CEO of Pantera Capital is optimistic about Solana
Pantera Capital CEO Dan Morehead confirmed during his appearance on CNBC on Tuesday that $SOL represents the company's largest exposure to digital assets amounting to $1.1 billion. Morehead argued that Solana is the fastest and most cost-effective protocol, having outperformed Bitcoin over the past four years.
The CEO emphasized the company's commitment to providing "access to something not well known but actually outperforms […] Our largest position is Solana, we have $1.1 billion of SOL on our books."
Institutional interest in Solana has surged significantly, with various companies, including Forward Industries and Helius, launching treasury strategies. SOL Strategies, a Canadian investment firm with exposure to Solana, began trading on the Nasdaq last week under the symbol STKE, underscoring Solana's maturation as a digital asset.
Retail interest in Solana remains relatively high despite the token increasing by about 50% from the $155 level on August 1. CoinGlass data shows that the average open interest (OI) for futures is $16.53 billion on Tuesday. The continued increase in OI indicates that more traders are betting on a short-term price increase for Solana, with targets at $250 and an all-time high of $296, reached on January 19.
Technical forecasts: Solana tests key support
Solana remains above the support level at $230 as bulls look for a quick recovery above the nearby target of $250. The token is also significantly above the key moving averages, including the 50-day exponential moving average at $201, the 100-day exponential moving average at $187, and the 200-day exponential moving average at $176, supporting the bullish outlook.
The same moving averages will act as temporary support levels if the macro environment fails to support a bullish outcome and asset holders sell, taking profits after the upward trend over the past weeks.
Daily chart for SOL/USDT
The sharp decline in the Relative Strength Index (RSI) from overbought territory at 61 indicates fading bullish momentum. If the decline continues in the coming sessions, the price $SOL correction may extend below $230 and possibly towards the 50-day exponential moving average at $201.
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