Why is Solana (SOL) price up today?
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Solanaâs price is up today as Jerome Powell delivers his most dovish outlook in years, raising bets on a 100% rate cut in September.
Solana price has rallied sharply today, mirroring similar upside moves elsewhere in the crypto market as traders focus on the likelihood of interest rate cuts in the coming months.
Jerome Powellâs dovish outlook boosts SOL price
SOL's price has risen by around 10% in the past 24 hours to reach $158.85 on Aug. 24.Â
The gains follow Federal Reserve Chair Jerome Powellâs strongest indication in years that his efforts to combat inflation have largely been successful. His outlook has fueled speculation of forthcoming interest rate cuts.
For instance, as of Aug. 24, bond traders saw a 76% probability of a 25 basis point (bps) rate cut in September, up from 64% before Powell's speech at Jackson Hole a day prior. Meanwhile, there is also a 24% possibility of a 50 bps rate cut in the same month.
Powellâs dovish outlook has led to a decline in the yields of both shortâand long-dated US Treasury notes. Lower yields reduce the opportunity cost of holding government bonds, prompting investors to seek opportunities in non-yielding assets like stocks and cryptocurrencies.
In the past 24 hours, Solana, as well as the entire crypto market, has heeded these macroeconomic fundamentals.
Solana open interest, funding rates rise
Solanaâs price gains today further coincide with its rising open interest (OI) and funding rates in the futures market.
According to data resource Coinglass, SOLâs OI was $2.19 billion on Aug. 24, up from $2.09 billion a day earlier. At the same time, its funding ratesâcalculated every eight hoursâhave risen to 0.0054% from 0.0028%.
