Solana price back in penalty box as volume abates via exiting traders

• Solana price tanked over 3% during the European trading session as risk-off sentiment hit the markets hard.
• SOL sees volume abating further as investors shun cryptocurrencies.
• Expect another leg lower as cash is withdrawn and the market cap is set to hit a new low.

Solana (SOL) price is taking punches as global markets roll over after digesting this eventful week with a lot of news from several central banks. The main message that can be retained, or the common denominator from it all, looks to be that 2023 will hurt. Markets have been so eager and too enthusiastic about the lower inflation numbers that they had started to price in a Goldilocks scenario, while both the US Federal Reserve, the European Central Bank and the Bank of England all shout in tandem that inflation will remain sticky and that a recession is unavoidable.

SOL traders must ask themselves: who do you trust?

Solana price is trading further away from $15.07, which was the key level to break to the upside to get a continuation in its recovery rally. Unfortunately, sentiment flipped once again this Friday as the dust settled, and traders have gotten the chance to digest what central bankers have been delivering as a message this week. The question is whether traders are back to trusting the central banks and will position themselves for that announced recession, or will they stick to the Goldilocks belief that 2023 will be a bull year for risk assets? 

SOL sees traders starting to come along with the message from the central banks. And that makes sense, as they see every metric, every economic data point coming in, analyzing it and feeding it to a battalion of economists and analysts that then plot a common view on it with the possible outcome for the native economy. The rule of thumb has always been, “Do not fight the central bank,” so traders should not try to outsmart them.

Expect a further decline in global markets, with cryptocurrencies facing headwinds out of that corner. A flight to safe havens with bonds and US Dollars in favor could strangle the price action even more. Once SOL dips below $12, it could see a nosedive move toward $10, printing a new low for 2022 as the lack of volume will start to trigger more violent and enlarged movements.

SOL/USD daily chart

Do not expect a turnaround anytime soon, or at least not before the weekend when traders can rethink the current market moves. Plenty of opinion pieces and analyses will be read on our website and other media sources so that traders can start 2023 with a clean slate. Small allocations in favor of SOL could help price action recover a bit, with again that $15.07 being crucial before talking about $18.66 to the upside.