Solana ETF inflows drop 96% as Fed raises rates

Solana ($SOL) faces a critical test at $94.40 as the Federal Reserve raised interest rates by 25 basis points on September 16, lifting the target range to 3.75% to 4.00%. The move removes the passive bid that had absorbed recent gains, with Solana ETF inflows collapsing from $153.87 million to $6.18 million in the week prior.

The token closed at $96.93 on September 16, a 5.45% decline from the previous session, placing it near its 20-day exponential moving average of $97.70. Although SOL remains up approximately 29% over the past month, the asset sits roughly 67% below its all-time high of $293 set in January 2025. The current trading range is defined by support levels at $94.40, $90.37, and $85.79, and resistance at $100, $105, $110, and $118.84.

Market participants are closely watching the Federal Reserve's decision, with prices reflecting an 88% to 94% chance of a hike. If the rate increase aligns with expectations, the immediate impact on price may be limited, shifting focus to whether SOL can hold the $94.40 support line. A break below this level would bring the 200-day moving average at $90.37 into focus, while a hold could allow buyers to push the price back toward $100.

Specific network developments also influence near-term sentiment. The Transaction V1 upgrade activated on September 15, increasing the network's transaction size limit by 3.3 times to handle more complex operations. The larger Alpenglow upgrade is scheduled to begin activation on September 28 via Agave v4.3 software developed by Anza. Validators must reassign delegated stake by September 21 to participate in this activation; a significant loss of stake would signal potential disruption.

Broader market conditions add further pressure. The VIX index, which measures expected stock-market volatility over the next 30 days, has risen 20% over the past month to 17.10. This increase indicates heightened sensitivity to risk ahead of monetary policy decisions. Higher interest rates generally pressure assets like Solana by offering investors alternative returns from short-term Treasury yields without comparable market risk.

Polymarket odds currently price a 67% chance that Solana hits $90 before year-end, suggesting traders anticipate a potential break of the $94.40 support. For SOL to break out of its current range, it would need to reclaim $100, a level that has acted as resistance since the token pulled back from its August 27 high of $110.65. A clean Alpenglow activation combined with recovering ETF inflows would be required to restore bullish momentum and potentially reach the August high.