Can SOL’s rally continue, or is it time for a pullback?

Let’s find out.

TLDR

• SOL's recent surge prompts caution, with the potential for a short-term pullback.
• Key resistance at $32.40 to $33.00, while $30.38 may become new support.
• RSI indicators suggest a deeper pullback may be needed to reset momentum.
• High funding rates signal strong bullish sentiment, potentially vulnerable to a squeeze.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Technical analysis

SOL is now battling above the $30.38 horizontal level, now potentially flipping that horizontal level into new support. We currently see that the $32.40 to $33.00 area is acting as strong resistance with sellers appearing. Regarding technical formations, we don’t have too much here; we would need more days of price action. 

We do, however, have stronger signals on the indicators. Let’s look into those. 

RSI and funding rates

The RSI is key here. We’ve seen 3 higher highs in price, with 3 lower highs on the RSI, all in overbought territory. The latest lower high is underneath the RSI-based MA. This would suggest that SOL needs a deeper pullback to reset some of these indicators. 

In terms of funding rates, SOL remains very positive. On Bitmex, the funding rate is 0.0454%, which is big. This shows longs are willing to pay a massive premium to shorts, and therefore very one-sided. And when the market is overly one-sided, that side may be vulnerable to a squeeze. 

Cryptonary’s take

SOL has moved up massively in the past week or so. Therefore, you’d expect this to have some pullback/reset, particularly with the trading indicators showing relatively overheated levels. 

Action

• We’d expect a pullback in price in the short term, where we will look to see if the $30.38 horizontal level holds as new support.