- Solana (SOL) is showing bullish signs despite a negative funding rate, with technical indicators hinting at a potential climb to $200.
- A breakout above key resistance and rising buying pressure support the bullish momentum in the short term.
Solana (SOL) is turning heads once again as it eyes a potential climb toward $200, despite what looks like bearish signals on the surface. With the altcoin breaking above a multi-month falling channel and showing signs of renewed bullish strength, market participants are rethinking their short-term expectations — and perhaps rightly so.
Over the past week, SOL surged past the $150 mark for the first time since early March. This move came after it successfully defended the $100 support level, a feat that suggests growing confidence among investors. However, technical indicators present a mixed picture.
Also read: Altcoin Rally Builds: Ethereum, XRP, Solana Lead Crypto Breakout Signals
Notably, the Moving Average Convergence Divergence (MACD) on the weekly chart shows a bearish divergence. Typically, this indicates that the recent price increase isn’t backed by corresponding momentum, hinting at potential exhaustion. Yet, this hasn’t deterred bulls, who are leaning on other signs for encouragement.
One such indicator is the funding rate. SOL’s perpetual futures currently have a negative funding rate of -0.0015%, implying that shorts are paying longs — a condition that often precedes short squeezes. In other words, aggressive bearish bets could end up fuelling a rally, as these positions get unwound in the face of rising prices.
Adding to the bullish case is the behavior of the Chaikin Money Flow (CMF) and Relative Strength Index (RSI), both of which suggest increasing buying pressure. The CMF being in positive territory signals accumulation, while the RSI’s upward trajectory indicates bullish momentum is building.
Technically, SOL’s breakout above the descending channel on the daily chart is a strong bullish signal. If this momentum continues, the coin could soon hit a short-term target of $171.43, which corresponds to the 0.618 Fibonacci retracement level. And if the broader crypto market maintains its upward trajectory, $200 could be well within reach.
That said, all eyes remain on trading volume. A sharp drop in buying activity could invalidate this bullish outlook, potentially sending SOL back toward $120.
But for now, the odds — and the funding rates — suggest that Solana’s rally may just be getting started.
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