SOL shorts are at risk

SOL is at the $61 horizontal resistance. A break above could see SOL push onto $69 and then $80. It's hard to call here, but we wouldn't Short.

TLDR

• SOL is facing a key test at $61 resistance; a breakout could trigger a short squeeze.
• With more shorts opening positions, the long/short ratio favours bears.
• The bullish structure is intact unless SOL drops below $52.
• Attractive long-term buy on dips to low $40s.

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 is really on the cusp here; a break above $61 could see a meaningful breakout higher to $69 and even $80. 
• $61 is the main horizontal resistance. However, a break above may drive a Short squeeze. 
• SOL is also squeezing into the pinpoint of the uptrend line and the horizontal resistance of $61 - the result could be a volatile move here. 
• The RSI on more major timeframes remains very overbought on the 3D and the Weekly. Note the 3D has also put in a bearish divergence. 

Market mechanics

• Open Interest has moved up again to $850m, just shy of the yearly high set a few weeks back at $933m. 
• But, what’s interesting in comparison to BTC and ETH is that the OI-Weighted Funding Rate for SOL has decreased over the last 8 hours, ramping down from 0.016% to 0.010%. 
• The Long/Short ratio is 0.9631, indicating more participants have piled into Shorts than Longs. It is a very different setup from BTC and ETH. 

Cryptonary’s take

SOL is really interesting here, particularly from a mechanics point of view. We’re seeing more Shorts open into the resistance of $61. These Shorts may be vulnerable to a squeeze, particularly if SOL breaks out of $61.

Regarding DCA’ing for SOL, we’ll add to our long-term bags if SOL can pull back to $52 with light DCA Spot buys. If SOL pulls back to $48, we’ll be even more aggressive with our DCA Spot buys down to the low $40s.