Solana rally cools off near $26: Are more gains likely?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- SOL cleared the Q1/Q2 2023 price ceiling of $26.
- Key technical indicators and on-metrics were positive.
During the recent recovery phase, Solana [SOL] outperformed Bitcoin [BTC] on the price charts. Notably, between mid-June and mid-July, BTC rallied from about $25k to >$30k, a +25% hike. SOL hiked +100% in the same period, rising from $14 to $32. SOL’s rally cooled off to $26 at the time of writing.
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Altcoins that were initially classified as ‘security” by US SEC in early June, like Cardano [ADA], SOL, Polygon [MATIC], etc., saw a massive price pump after the Ripple-US SEC case ruling boosted market sentiment.
Will the $26 support level hold?
On the daily chart, key technical indicators were positive. For example, the RSI (Relative Strength Index) entered the overbought zone, underscoring recent intense buying pressure. Similarly, the OBV (On Balance Volume) edged higher, confirming the massive demand from mid-June.
When zoomed out and expanded to capture 2022 price action, the breakout level and Q1/Q2 price ceiling aligned with 2022 June lows. The recent cool-off has eased to the above breakout level of $26.
On the 4-hour chart, there was a range-bound formation above $26, suggesting a potential rally if BTC remains bullish. So, the $26- $28 zone was an area of interest for bulls looking to enter long positions, targeting $34 or $39 resistance levels.
But, a breach below the Q1/Q2 price ceiling ($26) will weaken the daily timeframe market structure. Such a move could attract sellers to devalue SOL towards $23.9 or $20.
How much are 1,10,100 SOLs worth today?
Massive demand in the futures market
On Coinalyze’s 1-hour chart, SOL registered a massive increment in Open Interest (OI). The OI surged from <$200 million on 5 July to >$400 million at the time of writing. The CVD (Cumulative Volume Delta) also edged higher, collectively denoting improved demand in the futures market.