Solana News- What’s causing Solana (SOL) to rise in value today?

What factors are contributing to Solana (SOL)’s price increase today?

Solana News- Solana’s (SOL) price has recovered significantly after a sharp sell-off on August 5, often referred to as Black Monday. By August 6, SOL’s price had risen to just over $144, marking a 31% rebound from its recent low.

This recovery mirrors broader gains in the cryptocurrency and global stock markets, driven by positive economic data from the U.S. service sector and increased expectations for rate cuts in September.

U.S. Service Sector Expansion Eases Recession Concerns

The latest data from August 5 shows that the U.S. service sector grew in July, bouncing back from its steepest contraction in four years. This rebound has eased fears of an imminent economic downturn, contributing to sharp price reversals in riskier assets like Solana.

Specifically, the Institute for Supply Management’s (ISM) services index rose by 2.6 points to 51.4, surpassing the median forecast in a Bloomberg survey of economists. Readings above 50 indicate expansion, signaling renewed growth in the sector. This data follows government figures released on August 2, which revealed a rise in the unemployment rate to a nearly three-year high of 4.3% and a significant slowdown in payroll growth. These factors have increased expectations that the Federal Reserve may implement more aggressive interest rate cuts in 2024. According to CME data, there is now an 80.5% chance of a 50 basis point rate cut in September, up from 5.5% a month ago.

SOL Price Bounces Back After Hitting Oversold Threshold

Solana’s recent gains are part of a recovery that began after its daily relative strength index (RSI) approached oversold levels.

On August 5, SOL’s daily RSI dropped to 31.78, just above the oversold threshold of 30. Typically, when the RSI falls to or below 30, it signals that a price consolidation or rebound is more likely.

For example, SOL/USD rebounded by up to 51.50% a month after its daily RSI approached 30 in June. With the increasing likelihood of rate cuts in the U.S., traders might be anticipating a similar rebound in the coming weeks.

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