Solana struggles for traction after facing resistance at $67

TLDR

• SOL hit resistance and topped out around $67, now pulling back.
• Bearish divergence and overbought indicators suggest retracement ahead.
• The futures market is still elevated, but longs/shorts are more balanced.
• SOL keeping support at $48 is critical, but we may go for aggressive buys under $42 if the level is breached.

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 1D

Technical analysis

After putting in what seems to be the local high at $67, SOL has begun to move lower. Is the move over?

• After putting in a new high at $67, SOL put in a bearish divergence by creating a higher high in price and a lower high on the oscillator while also in overbought territory. 
• The local support is currently at $55, which needs to hold, or there will be a clear path down to $48.
• The 3D and the weekly timeframe remain heavily overbought, suggesting that a more substantial pullback may be needed to reset some of these indicators back to more neutral and healthy levels that price can then move higher from again. 

Market mechanics

The futures market behind SOL remains somewhat overheated but with longs and shorts coming into a more even balance. 

• In the last month, SOL’s open interest has gone from $300M to $933M yesterday, and it is now back down to $780M following yesterday’s move down in price. 
• The funding rate has decreased from a very high to 0.0120%. Still, the long/short ratio is at 0.9286 - this means that over the past 24 hours, shorts piled in, which has helped bring the funding rate down to more neutral levels, indicating that the futures market is in a better balance between longs and shorts. 

Cryptonary’s take

Less so now from a mechanics view, but from a technical analysis view, SOL remains overheated with a more meaningful pullback underway. The mechanics side of the market is overheated but with no major bias from the market towards being long or short. 

The main support for SOL is at $48. If SOL reaches this price point, we will be DCA buyers for SOL over the long term. If SOL breaches below $42l, we will be aggressive DCA buyers of SOL at those prices.  

In the short term, we are not looking to take any action on SOL.