Will SOL mark top at $37 or will it push higher?

TLDR

• Solana's impressive performance continues, defying expectations of a potential slowdown.
• A pennant-like pattern indicates a potential target of $37.19 for SOL, but caution is advised as it may signal a local top.
• Solana's RSI reset offers potential for upward movement while increasing open interest suggests caution for long positions.

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

SOL formed a pennant-like pattern, although it wasn’t super clean. We did see a slight breakdown of the pennant on Sunday. However, price was able to reclaim and move higher quickly. We’ve now broken to the upside. The next target we feel for SOL is the $37.19 area. 

However, we think once $37 is reached, it may be the local top, and we may get a further reset from there. Where that reset goes is hard to know. We may retest the $33 area and test that as new support. 

SOL 12-hour

RSI and funding rates

The RSI on the 12-hour has reset somewhat. When in overbought territory, it's really necessary to get a few days of price action where price remains in a range. This essentially helps reset the RSI, allowing the coin to go higher. We remain overbought but at slightly less over-exhausted levels. For now, SOL can continue higher. 

Regarding funding rates, SOL remains very positive, but open interest has increased. This indicates that a lot of longs are open on SOL. It’s probably nothing; it is something we should be somewhat more cautious of. However, it isn’t enough to change our view that SOL goes higher from here.  

Cryptonary’s take

Having been wrong on SOL, we began accumulating SOL over the weekend, even though we felt we were paying a premium for it. The price we got was $32.50; we’re now close to $35. Sometimes, when the market shows you material strength, the wise man has to adjust to the new data. 

There’s no point swearing blindly by an opinion when new data throws that thesis into heavy doubt. 

Action

• So far, SOL has shown signs of exhaustion, but it has continued to move higher. We must respect the strength of that momentum.
• SOL has had an immense move and will likely have a more substantive pullback at some point; however, that may come when the price is another 10-20% higher from here. 
• If you’re under-allocated to SOL, you should DCA into any meaningful retests.