Solana extended its recent rally this week as macroeconomic and geopolitical developments, rather than fresh token-specifics, continued to dominate price action. The move higher was driven by dovish comments from New York Fed President Williams and Fed Vice Chair Jefferson, which gave the broader cryptocurrency market a boost despite the ongoing US-Iran stalemate — a familiar pattern for digital assets, which trade as risk assets and tend to move with shifts in Federal Reserve policy expectations that shape dollar liquidity and global risk appetite.

Williams and Jefferson are two of the three members of the Fed's so-called "troika," alongside the Fed Chair, and their remarks tend to carry significant weight with markets, as traders treat comments from this inner circle as a gauge of where the broader policy-setting committee is leaning. Their comments this week — Williams indicated that one more hike this year is likely enough, while Jefferson said weighing more data will allow the Fed to make a better call on rates — triggered a dovish repricing that pushed the probability of an October rate hike down from around 70% to roughly 25%. Those odds, implied by pricing in interest-rate futures, are among the most closely watched gauges of where traders see the Fed heading next.

Fed Path and Middle East in Focus

Looking ahead, attention will remain on developments in the Middle East and the Federal Reserve. A breakthrough in US-Iran negotiations could provide further support for Solana, as expectations for aggressive Fed tightening would likely be pared back further. Conversely, a prolonged stalemate or renewed escalation could limit the upside unless the Fed continues to sound more dovish than markets expect.

The US Non-Farm Payrolls (NFP) report is also on the day's agenda. The monthly jobs release is one of the most market-sensitive data points on the calendar, as hiring strength or weakness feeds directly into expectations for Fed policy. Given the recent comments from Williams and Jefferson, the analysis notes that it would likely take a blockbuster report — with data beating expectations across the board — to revive expectations for an October hike. Such an outcome could trigger another hawkish repricing and weigh on Solana in the short term. In-line or weaker-than-expected data, on the other hand, would likely reinforce the dovish repricing and give Solana room to extend its recent rally. Traders will be watching how rate odds in futures markets shift in the hours after the release.

Technical Analysis

Daily timeframe: On the SOL/USD daily chart, Solana found support from the dovish Fed comments. The major upward trendline remains a key support level in the event of a pullback. Buyers are expected to lean on the trendline, with defined risk below it, to keep targeting the 149.00 level, while sellers will look for a break lower to extend the correction into the 97.00 support next.

4-hour timeframe: A minor support zone sits around the 117.00 level. A pullback into that zone could see buyers step in, with defined risk below the support, to keep pushing toward new highs, while sellers will look for a break lower to extend the pullback toward the major trendline.

1-hour timeframe: A minor upward trendline is defining the recent bullish move. Buyers may lean on it, with defined risk below it, to keep pushing into new highs, while sellers will look for a break lower to extend the pullback into the 117.00 support.

Upcoming Catalysts

The trading week concludes with the release of the US NFP report, which the economic calendar lists among the day's key events. With October hike odds already pared back sharply this week, the print is the next major checkpoint for whether the softer rate outlook that has underpinned the crypto rally holds.

This article is based on analysis originally published by InvestingLive.