Solana’s (SOL)price rallied almost 10% from a low of $128 over the past 24 hours after the US Federal Reserve announced a rate cut by 50 basis points, lowering interest rates to 4.75%-5%.
SOL price rebound eyes $140 breakout
While the 0.5% cut was largely expected, Bitcoin and the wider crypto marketreacted positivelyafter Jerome Powell’s dovish speech despite the economy having a “solid” growth rate.
The Fed Chair noted:
“I don’t see anything in the economy that suggests the likelihood of a downturn is elevated. You see growth at a solid rate, you see inflation coming down, you see a labour market that’s still at very solid levels”.
Additionally, Solana’s high price correlation with Bitcoin continues to boost the altcoin market as the entire crypto market rose in response to the macro event.
Thechart indicatesthat SOL and BTC share a 90-day rolling correlation index of 0.74.
Solana-Bitcoin correlation index. Source: blockchaincenter.net
SOL funding rate hits two-month high
Another possible reason why Solanademonstrateda rapid pump is futures traders. The SOL funding rate jumped to a new two-month high of 0.0107.
Solana Open Interest, Funding rate. Source: Velodata
Open interest, or OI, has been progressively increasing over the past week, but a flash spike in the funding rate indicates a trend shift since it was negative a week ago.
A price rise of 4% on Sept. 19 coincides with the funding rate spike, which suggests that more future traders are going long. A similar spike in the funding rate was last observed in July when SOL price rallied from $134 to $193, or 43%.
Solana continues to find support at $127
Earlier this month,Cointelegraph highlighteda major support range for Solana at $127. Despite several retests of this level in the last few days, SOL has not closed a daily position below $127 since April.
Solana 1-day chart. Source: TradingView
With increasingly favorable market conditions post-rate cut, traders are now eyeing this range at the potential bottom, as the price aims to break above resistance at $140.
One key confluence observed on the 4-hour and 1-day chart is the current attempt to break above the 200-day EMA level.
On the 4-hour chart, SOL has successfully retained a bullish position above the indicator, and it will take place on the daily chart once SOL moves above $140.
If SOL/USD can move above $140 in the next few days, Solana’s immediate price target would be $160, or a 16% gain.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
