- Solana’s price surged 10% after the US Federal Reserve cut interest rates by 50 basis points.
- Solana’s strong price correlation with Bitcoin continues to boost its position in the altcoin market.
- Funding rate spikes suggest increased interest from futures traders, supporting a potential price move to $160.
Solana (SOL) saw a strong rally of nearly 10% in the last 24 hours, recovering from a low of $128. The price increase follows the US Federal Reserve’s decision to cut interest rates by 50 basis points, bringing them down to a range of 4.75%-5%. The broader crypto market, including Solana, reacted positively after Federal Reserve Chair Jerome Powell’s speech, which signaled confidence in economic growth and falling inflation.
SOL Eyes $140 Resistance After Rally
While the rate cut was widely anticipated, Powell’s comments on the strength of the economy boosted market sentiment. He remarked, “You see growth at a solid rate, inflation coming down, and a labor market that remains strong.” Solana, which has shown a high price correlation with Bitcoin (BTC), benefited from this broader market optimism. According to data, Solana and Bitcoin’s 90-day rolling correlation index stands at 0.74, indicating that when Bitcoin rises, Solana often follows.
Futures Traders Bet on Solana’s Upside
Another factor supporting Solana’s surge is increased activity in its futures market. The SOL funding rate, which measures the cost of holding long positions in futures contracts, reached a two-month high, reflecting traders’ growing interest in betting on Solana’s price rising further. A similar spike in July 2024 saw SOL’s price climb from $134 to $193.
Despite multiple tests of the $127 support level, Solana has remained resilient. Now, with the current positive momentum, traders are watching closely for a breakout above the $140 resistance level. If SOL successfully surpasses $140, the next target could be $160, marking a potential 16% gain.
