We are cautiously optimistic about SOL

But SOL on its own is beginning to look somewhat top-heavy here.

We love it for the long run but wouldn't look to add fresh positions at the current price.

However, we see opportunities in Q1 that'll allow us to add considerably to our SOL bags at better prices.

• SOL has done phenomenally well to reclaim its uptrend line again and has broken to new local highs.
• The major horizontal resistance is at $81; if SOL can comfortably get above this price, it opens the door for the price to establish itself in a higher range between $81 and $91.
• If SOL cannot get above $81, it's likely the uptrend line may be broken, and SOL might revisit $61 as this is a major horizontal support.
• Open Interest in SOL has spiked back up and is close to its high of $1.1b, currently at $1.0b. It is up from $800m two days ago - a 25% increase. Caution.
• The Funding Rate has remained high, and even though it has come down a touch, it remains comfortably in the 0.03% area, which indicates that there are a lot more Longs than Shorts. If this goes further positive, Longs become more vulnerable to a squeeze.
• The RSI on the 3D and Weekly both remain phenomenally overbought. This is likely to come down in the coming month or two.

Cryptonary's take

In the next few days, SOL may remain near its highs as the SOL ecosystem continues to perform well.

However, we see that in the coming months, SOL will likely lose its uptrend and break lower.

For the long term, this is positive as it enables prices to consolidate to have more organic moves and then go up later. In the medium term (the next month or two), we may see SOL back between $56 and $61. In the coming months, if SOL does move down to $56 - $61, we will be big DCA buyers of SOL for the long term.

If anything sub $56, we would be aggressive with our DCA buys.

A break above $81 would invalidate my short and mid-term bear thesis, and we would then reassess from there.