Market Direction

SOL skyrockets, but could it stay skybound?

Updated: Aug 23, 2024

Published: Oct 24, 2023

SOL is overbought. However, it has cleared above its main horizontal resistance of $26. Now, it is in the next range between $30.38 and $37.19.

However, SOL would need to turn $30.38 into new support to fuel further moves higher.

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.

TLDR

SOL exploded above $26 on the horizontal into the $30-37 resistance zone.
It needs to flip $30 into support to fuel further upside moves.
Extremely overbought on daily RSI, so a pullback is very likely.
Long-term still undervalued, 87% below ATH.

Technical analysis

With SOL being this overbought, it can be expected to see a pullback in price. For SOL, the aim should be for price to form new support above the horizontal level of $30.38. It should flip it from resistance and establish it as the new support.

SOL Solana rally

RSI and funding rates

SOL is another overbought asset- it is hitting 81 on the RSI on the daily timeframe. Funding rates are also very positive now, indicating that the positioning for traders is long. Longs are paying shorts the premium to be long.

Conclusion on trading SOL

The overriding feeling here is that the market has gone up massively due to the ETF news, and SOL is, therefore, very overbought. SOL is still approximately 88% down from its all-time highs, so it trades at a significant discount.

Therefore, in the long term, SOL is still undervalued. However, it is so overbought, so, we may see a pullback in price in the short term.

Action

We have identified two yellow box areas below the current price, which could be buying areas if the price has a more meaningful pullback.
Currently, the market is euphoric. In the coming month or two, sentiment may change if a recession comes to the forefront or inflation rears up again, which may see SOL pullback.