SOL bounce possible — but risks remain

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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• The SOL Open Interest is up substantially, and it's currently now short-dominated. We can see this in the fact that the Funding Rate is meaningfully negative (at -0.018%), i.e., Shorts are paying a premium to Longs to be Short.
• This opens the door for a small Short-squeeze in the medium term, that might take the price up to $170, but we would then expect the price to roll over from there.

SOL's open interest (by USD value):

Technical analysis

• SOL was rejected from the $180 level, and the price has since pulled back into the horizontal support of $162.
• Price is also currently sitting on top of the main uptrend line. If this uptrend is lost, we can expect the eventual landing zone to be $148, and potentially $120 to $130.
• $180 is the key level to the upside.
• To the downside, the key level is $148, and then you have the $120 to $130 zone.
• The RSI has meaningfully reset on this pullback, and it's now also putting in a hidden bullish divergence (higher low in price, lower low on the oscillator).

• Next Support: $148
• Next Resistance: $180
• Direction: Bearish
• Upside Target: $180
• Downside Target: $120

Cryptonary's take

SOL does have some bullish elements here, but it is also battling bearish elements like many of the other charts. SOL is at a key level here, sitting on top of its uptrend line, and the horizontal support of $162.

If price can get a small bounce in the short term, this still wouldn't change our view that we do expect to see a more significant SOL pullback to at least the $120 to $130 levels over the coming 3-5 weeks. In that area, we'll likely begin becoming constructive again and looking to add to our long-term Spot bags in that $120 to $130 area. In the meantime, once again, patience.