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And from a mechanics’ perspective... it’s simply madness!
The OI is extremely high, with Funding at 0.1%; this is ten times more than the standard healthy rate, meaning Longs are paying Shorts a huge premium to be Long.
Unless price consolidates and Longs slowly unwind (best case scenario for Longs), this likely ends in a more meaningful flush if the Spot bid cannot be maintained.
Technical analysis
- SOL had a nice breakout from the wedge/pennant-like pattern but is now running into local resistance.
- $117 is a local resistance for price, while $109 is a local support.
- The overhead major resistance is $131, with the main horizontal support now being $99.
- The RSI has calmed down on mid-timeframes but remains very overbought on the 3D and the Weekly.
Cryptonary's take
SOL has performed phenomenally so far. And while there could still be more meaningful upside, potentially to $130-$140, we'd feel uncomfortable adding new positions at current prices with any major size.We're still moving into the ETF decision with four full months until the halving.
In the next few months, we may see some profit-taking and repositioning into the coins that haven’t run as well yet.
SOL would be the number one candidate for this repositioning. So, we are reemphasising caution on SOL. This does not necessarily mean we’re selling it, but we would wait for lower prices a month or so post ETF before adding more meaningful size (if you have spare capital on the sides).
If prices hold up relatively well in the next two months, you can bite the bullet and buy SOL.
But really, we'd be surprised if SOL was massively higher than it is now in the next two months.
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