SOL is no longer defying gravity

SOL is finally having that major pullback after skyrocketing more than 100% in two weeks. Where is SOL headed next? Let’s find out. 

TLDR

• SOL has experienced a significant pullback down to the $37/$38 levels.
• Short-term prospects depend on whether $37 support holds and forms a new range.
• RSI indicates overbought conditions, while funding rates and open interest suggest caution.
• SOL's fate is tied to Bitcoin's performance at this point.

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 has rejected into the $47/$48 area, and now price has moved down to $37/$38, which we have as a horizontal support level. If this level is lost, the next level is $32.50 to $33.00. We like this area for long-term entries for SOL. 

Ideally, in the short term, we’d like to see the $37 horizontal support hold as new support and SOL build a range at this higher price point. This is something we’ll have to assess going forward.

If BTC pulls back more considerably, SOL will likely struggle with the rest of the market. Again, it’s very hard to read here as it will depend on whether the key levels for BTC are lost or not.  

SOL 1D

RSI and funding rates

The RSI on the daily timeframe is still very overbought, which suggests SOL can see further downside. However, the positive (if you can take it as a positive) is that SOL hasn’t created a bearish divergence. 

We need to be ultra-careful here. SOL’s funding rate is very positive again. Also, the open interest is going meaningfully higher… again. This suggests an overheated derivatives market that is being longed quite heavily.  Therefore, it is potentially vulnerable to a shakeout, which could see further downside. Again, be careful here. 

Cryptonary’s take

Currently, our conviction level for the market's next move is quite low. It’s very hard to see what’s coming with BTC at key levels and alts ultimately being dependent on BTC’s movement.  

Action

• We would remain cautious on SOL here.
• For long-term entries, we like SOL below $32. 
• The long-term target for SOL is the prior all-time high of $255.