SOL above $61 - Can it stay there?

OI is high. Funding was extremely positive this morning; it has since reduced, but still very positive. Longs should be cautious.

TLDR

• Solana reclaimed the previous $61 resistance but uptrend line resistance looms overhead.
• Funding rates spiked heavily, indicating overcrowded Solana longs are vulnerable.
• Open interest remains elevated and likely needs more of a pullback.
• We have our eyes on $52 as a key DCA level on any Solana dip, with will be open to shorting SOL if funding spikes again.

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.

SOL 12hr

Technical analysis

• SOL has been able to reclaim the horizontal resistance of $61. It’s now important for price to turn this into new support. 
• SOL remains beneath its main uptrend line, which is acting as another resistance.
• The RSI has reset on all timeframes except the 3D and Weekly, which remain extremely overbought. These will need to come down at some point. 
• If there is a pullback, we would be DCA buyers of SOL at $52. 

Market mechanics

• Open Interest is down from its highs of $983m to $908m. In our opinion, this likely needs to come back more.  
• The OI-Weighted Funding Rate shot up massively last night and the early hours of this morning to 0.0923% - huge. This indicated that Longs were too overweight and offside. As price has pulled back from $66 to $63, Funding has pulled back to 0.038%. This is still too high, really. 

Cryptonary’s take

SOL’s mechanics were very unhealthy this morning, with too many Longs having piled in that Longs were then vulnerable to a squeeze. We’ve seen this reset slightly, but this likely has further to pull back first to shake out the excess leverage. 

If SOL does pull back, we would add light DCA orders to SOL at $56 and be more aggressive with DCA orders sub $52.

Regarding short-term trades, the opportunity was Shorting SOL at $66 when Funding was majorly positive this morning. If Funding moves up again, this may provide another opportunity for a short-term Short. 

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make