The question on everyone’s minds now is whether SOL's ascent has reached a point where caution is not just advisable but necessary.

Here’s how to play SOL from here! 

TLDR

• Solana (SOL) continues to exhibit an exceptional performance.
• Caution is advised due to significant overextension in SOL's price.
• SOL's current range between $37.19 and $48 is crucial for its medium to long-term prospects.
• Despite the overextension, SOL's recent rally can be seen as a correction from the collapse following FTX's November 2022 incident.

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

We initially felt that SOL was up so much that we felt the $37.19 horizontal resistance could act as a reasonable resistance level for SOL. But no, she stormed past that level. SOL now finds itself between the $37.19 and $48 levels. 

If SOL can continue in this new range and turn $37 into support, that’ll be hugely bullish for the medium and long term.  

SOL 3D

The above is the 3D chart for SOL, which does look very over-extended. 

However, this move is retracing the downtrend following FTX’s collapse in November 2022, where price fell from $37 down to $13, with a low of $8. 

So, this move higher could be argued as just a return to a price level that SOL should be at, having been so massively oversold in the prior 12 months. 

SOL 1D

RSI and funding rates

When we look at SOL on the daily timeframe, we see that the RSI is very overbought, but it hasn’t put in a bearish divergence. SOL, being this overbought, should encourage us to exercise some caution.

Funding rates have seen a turn. SOL’s funding rate is now negative, indicating shorts have begun to pile in here. With open interest also ramping up, this could suggest that a short squeeze could be on the cards. However, we wouldn’t encourage longing into this simply due to SOL already being largely overbought. 

Cryptonary’s take

SOL has performed fantastically and continues to do so. 

We would not look to add new positions with the current setup. Instead, we would look to add to our SOL bags for the long-term on more meaningful pullbacks. 

Action

• We’re not looking to take out new SOL longs/buys at the current price.
• We would look to add to our long-term SOL bags on a retest of the $32 - $33 range.