Solana Traders Raise Funding Rates 101% to Bet on US Fed Rate Decision

Solana Price Analysis:

Solana price rebounded within 24-hours to hit $127 on Sept 7, SOL traders mounting unusually high LONG positions ahead of the next US Fed Rate decision scheduled for Sept 17.

Solana Avoids $120 Breakdown amid Intense Market Volatility

In early September, global crypto markets saw significant downturns, with Solana, Bitcoin, and Ethereum all posting double-digit losses.

Between September 1 and September 6, Solana dipped 12%, marking a new 30-day low at $120.20. This came amid heightened uncertainty in the macroeconomic environment, driven by inflationary pressures and expectations of further interest rate hikes.

However, the dovish NFP report, showing weaker-than-expected job growth, injected fresh optimism into the crypto markets. Solana’s price reacted positively, erasing 7% of its earlier losses to climb above $127 on September 7.

After an initial muted reaction, Solana price slid to a new 30-day low of $120.20 on Sept 6, down 12% within the weekly timeframe. But as the demand returned to the markets SOL price has erased 7% of the losses, as it rose above the $127 mark at the time of writing on Sept 7.

The bounce highlights the market’s anticipation of slower U.S. Federal Reserve rate hikes in the coming months.

Solana Funding Rate Spikes 101%

Solana price movements on Sept 7 suggest bull traders may be making delayed positive response to dovish figures in the latest NFP report released on Friday.  In an indication of this, markets data shows that SOL bulls have been deploying more aggressive trading strategy over the last 24-hours.

Over the last 24 hours, SOL’s funding rate spiked dramatically, flipping from a negative value of -0.48% to a positive 0.0022%, an increase of over 101%. This shift signals a renewed bullish outlook for SOL, with traders taking more aggressive long positions.

In futures contracts, the funding rate reflects the cost of holding long or short positions. When it turns positive, it indicates higher demand for long positions, typically a bullish indicator. Solana’s funding rate surge suggests that traders expect the asset’s price to rise, especially as the crypto market bounces from its September lows.

This rise in funding rates right after the dovish NFP figures hints at further upside for SOL in the coming weeks. Traders betting on prolonged bullish momentum will likely maintain these long positions if the macroeconomic environment continues to favor risk assets like cryptocurrencies.

Solana Price Forecast: SOL Could Reclaim $150 in September

Technically, Solana shows potential for further gains. Using the Bollinger Bands (20, 2), SOL’s price is approaching the middle band, suggesting the asset may be entering a recovery phase.

A break above $130 could confirm a bullish reversal, with the first key resistance at $140.64. If bulls maintain control, SOL could rally toward the next major resistance at $161.85.

On the downside, immediate support lies at $119.43, followed by a key support zone near $112.42. The Woodies Commodity Channel Index (CCI) shows SOL is exiting oversold territory, reinforcing the likelihood of an upward move.

In conclusion, if the macroeconomic backdrop remains supportive, Solana could reclaim the $150 zone in September, driven by renewed bullish momentum and aggressive long positioning. However, traders should watch for macro events like the upcoming Federal Reserve rate decision, which could influence broader market sentiment.