In a recent analysis by Cryptonary, the spotlight is on Solana (SOL) as it managed to rise above the crucial $61 resistance level. However, the question that looms is whether this newfound strength can be sustained. Currently, Solana is trading at $62.24 with a 24-hour trading volume of $2 billion, down by 22.74%. The price is also down 4.89% in the last 24 hours, while it is 4% up in the weekly chart. The current CoinMarketCap ranking is #6, with a market cap of $26 billion.
Cryptonary’s analysis points out that while SOL has successfully reclaimed the horizontal resistance of $61, the real test lies in transforming this level into a robust support. Despite this achievement, SOL remains below its primary uptrend line, posing an additional hurdle as it acts as resistance.
Technical analysis reveals a mixed picture with the RSI resetting on most timeframes, except the 3D and Weekly, which remain in the overbought territory. It indicates a potential need for a correction in the near future.
Market mechanics also play a crucial role, with Open Interest (OI) experiencing a slight decrease from its peak of $983 million to $908 million. Cryptonary suggests that further reduction might be necessary. The OI-Weighted Funding Rate surged dramatically, signaling an overemphasis on Long positions. Even though it has retreated from the highs, standing at 0.038%, Cryptonary still deems it to be relatively high.
Solana: Unhealthy Morning Dynamics and Potential Pullback
Cryptonary’s take on Solana’s current state emphasizes the unhealthy market dynamics earlier in the day. An influx of Long positions made the market susceptible to a squeeze, prompting a slight reset. However, Cryptonary anticipates a more extensive pullback to alleviate excess leverage.
While a pullback, Cryptonary recommends strategically adding Dollar-Cost Averaging (DCA) orders for SOL at $56, with a more aggressive approach for orders below $52. For short-term traders, the analysis highlights a missed opportunity to short SOL at $66 when funding was overwhelmingly positive earlier in the day.
Cryptonary hints that another short-term shorting opportunity may emerge if funding regains strength. However, the battle for SOL above $61 unfolds, leaving the SOL community eagerly watching for the next move in this dynamic landscape.
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