Solana bulls on thin ice as price puts in lower highs

If the local support of $56 breaks, the uptrend line must act as support. Otherwise, we could see $48.

TLDR

• SOL is rejecting lower at $58-59 and unable to break higher.
• Loss of support, decreasing volumes and lower highs signal weakening.
• The breakdown of the uptrend could trigger a drop to $48.
• Signs point to further pullback ahead before the bottom.

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 4hr

Technical analysis

• Price currently holds above the local support of $56, but we’re seeing SOL reject into the local level of $58 to $59.
• At this level, SOL is okay. However, if there is a break beneath $56, that would bring the main uptrend into sight. If the main uptrend line is broken, that could be what sends SOL to $48.
• A reclaim of $61 would take SOL back above the neckline of the head and shoulders. That’s what we’d be waiting on for further bullish momentum.
• The RSI has reset on all timeframes except for the 3D and Weekly, which remain extremely overbought.

Market mechanics

• Open Interest has risen to $725m again, which remains well above the yearly average. However, it seems Open Interest is consolidating at higher levels as SOL is more heavily traded than it was 6-12 months ago.
• The OI-Weighted Funding Rate is flat at 0.01%, indicating a slight bias to be Long but that Longs and Shorts are in even balance. This is healthy from this perspective.

Cryptonary’s take

From a market mechanics perspective, SOL looks to be in a healthy spot. However, the technicals suggest signs of weakening, with some key levels below the current price. If price loses $56 and can’t hold the main uptrend line, this would likely see a deeper pullback, with a potential target of $48.

SOL will likely need a Bitcoin breakout for its bullish momentum to continue. SOL is showing signs of weakness, particularly in the decreasing volumes.

We remain patient with SOL here as we feel it has further room to pull back when considering the above. We would look to begin adding to our bags with light DCA orders at $48 and lower. If $44 is presented, we’d be more aggressive with our DCA orders.