Solana (SOL) remains under significant selling pressure after losing approximately 9% of its value over the past week, with deteriorating market sentiment and weakening network activity raising concerns about further losses. The sell-off has unfolded against a backdrop of US political uncertainty and growing expectations of tighter monetary policy, both of which have weighed on cryptocurrency markets. The token is now approaching a key support region around $80 as investors respond to rising expectations of a Federal Reserve interest rate hike in December.

Recent comments from Fed Governor Christopher Waller have reinforced those expectations, with the probability of a rate increase climbing to 99%, according to CME FedWatch figures cited in the report.

Fed Rate-Hike Expectations Jump to 99% After Waller's Comments

Expectations of tighter US monetary policy have intensified following hawkish remarks from Federal Reserve Governor Christopher Waller. Speaking at a conference hosted by the Bank of England, Waller expressed support for another interest rate increase at the Federal Open Market Committee's December meeting. He indicated that even if inflation conditions improved compared with September, he would still favor raising the federal funds rate by 25 basis points. Waller also suggested that more aggressive action could be necessary if inflation substantially exceeded his expectations.

The comments prompted a sharp adjustment in market expectations. According to CME Group's FedWatch Tool figures cited in the report, the probability of a December rate hike increased from 84% the previous day to approximately 99%. The tool derives its implied policy probabilities from pricing in federal funds futures, making it a widely followed gauge of how traders view the rate outlook. The shift suggests that traders increasingly expect the Federal Reserve to maintain a restrictive monetary policy stance. For cryptocurrencies, higher interest rates can create a challenging investment environment, as tighter policy lifts the yields available on lower-risk assets and can dampen appetite for riskier holdings. Market attention now turns to the December FOMC meeting, where policymakers will decide whether to follow through on the rate increase Waller has signaled.

Technical Outlook: SOL Risks Falling to $74 if $80 Support Breaks

Solana's technical outlook remains bearish as the cryptocurrency approaches an important support region around $80. On the daily chart, SOL is nearing a fair value gap (FVG) formed during the August rally. Fair value gaps are price imbalances left behind by sharp one-directional moves, and traders often watch the zone for a potential reaction when price returns to it. For Solana, the current FVG could provide an important demand zone where buyers attempt to defend the cryptocurrency. However, a decisive breakdown below the support region would weaken the technical structure further.

If SOL fails to stabilize around $80, the next significant downside target stands near $74. A sustained move below this level could expose the cryptocurrency to additional losses, although the analysis does not identify a confirmed lower support target.

Momentum indicators also suggest that bearish pressure has intensified. The daily Relative Strength Index (RSI) has declined to approximately 23, placing Solana firmly in oversold territory. An RSI below 30 generally indicates that selling momentum has become stretched, potentially increasing the likelihood of a temporary rebound.

Despite the prevailing bearish conditions, Solana's oversold momentum readings suggest that buyers could attempt a recovery near the current support region. The $80 area remains particularly important because it coincides with a fair value gap that could attract buying interest. A successful defense of this region could encourage a short-term rebound, potentially allowing SOL to recover toward its nearest significant resistance around $95. Conversely, failure to defend $80 would increase the likelihood of a decline toward $74. Between now and the December FOMC decision, traders are likely to keep a close watch on that support level and on any further signals from Fed officials.

This article originally appeared on CoinJournal.