SOL’s speedy rise is impressive, but is it time for a pullback?

Now, the engines have burned hot, and there's a critical decision to be made. Will SOL push even further, or take a breather and regroup? Let’s find out. 

TLDR

• Solana (SOL) has experienced a significant upward move, but caution is advised.
• Technical analysis suggests a potential resistance at the $37.19 level.
• RSI is in overbought territory, and funding rates remain positive.
• Expectation of a meaningful pullback to the $32 to $33 range

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

After breaking out of the bull pennant/wedge-like pattern, SOL has shot higher to the $37.19 horizontal resistance that we marked out. Of course,price has now found that level to be a resistance, at least in the short term. 

After gaining nearly 90% in just a few weeks, we feel that SOL is at a price point where it will experience a more significant pullback. 

If SOL does decide to reject from the $37.19 horizontal resistance, then we would like for the $32 to $33 level to act as a more major support for SOL’s price. 

SOL 12-hour

RSI and funding rates

The RSI on the 12-hour did reset slightly but has now moved back into overbought territory following yesterday’s move up into the $37 area. There were several bearish divergences. However, they have been invalidated with yesterday’s new high. 

Regarding funding rates, SOL remains very positive. Open interest is now at a high level, suggesting there is a large bias to be long rather than short here. 

Cryptonary’s take

Following such a massive move higher, we wouldn’t be surprised to see SOL have a more meaningful pullback where the target area may be in the $32 to $33 range. If BTC can continue higher, SOL may hold up at this high price. We doubt SOL’s ability to immediately break higher into the $40s in the near term just because of how overheated it is.

We, therefore, expect a pullback to the $32 to $33 area before moving higher from there.  

Action

• If you’re under-allocated to SOL, you should DCA into any meaningful retests. 
• Price has made that 10% move higher from the low $30s like we were expecting. Now, we feel this is overheated, so a deeper pullback may be on the cards. 
• If price retests the $32 to $33 area, this may be a good area to DCA into for the long-term.