Recent weeks have seen fluctuations in SOL’s price performance, with gains of 7.64% monthly and 5.38% weekly, but a 1.49% daily decline after encountering a resistance line.
Despite these changes, market sentiment has been volatile, transitioning from bearish to more positive outlooks.
Challenges to SOL’s Upward Momentum from Resistance Levels
Currently, SOL is in a consolidation phase, facing resistance levels at the upper, midrange, and lower boundaries.
The trajectory of SOL in both short and long terms is significantly influenced by the midrange and upper resistance levels. Breaking above the upper boundary line is essential for a sustained rally.
In the short run, resistance at the midrange can hinder price increases, but overcoming it could push SOL towards the upper boundary, potentially reaching $188, the upper limit of the consolidation channel.
If this resistance is not broken, the price could drop to $126 or lower.
Despite historical sell-offs triggered by this resistance zone, CryptoCrypto’s analysis suggests a potential push for SOL towards $188.
Market Sentiment Supports Short-term Rally for SOL
Market sentiment has turned bullish, with increased bullish activity noted by CryptoCrypto through short liquidations and rising Open Interest.
There has been an uptick in short liquidations, with $3.27 million worth of short positions closed, indicating market movements contrary to short traders’ expectations and hinting at a potential new high for SOL.
Additionally, Open Interest has surged by $290 million from 26 September, signaling enhanced market confidence with investors actively initiating or expanding positions.
Furthermore, CryptoCrypto identified indicators supporting a bullish advance for SOL.
Anticipated Intensification of Buying Pressure for SOL
Coinglass data revealed that Solana’s netflows have been negative over the past seven days, indicating more SOL being withdrawn from exchanges than deposited.
This trend suggests investors are holding onto their SOL anticipating price appreciation, thereby reducing the available supply on exchanges.
If this trend persists, SOL’s short-term outlook would be bullish, potentially aiding in overcoming current resistance levels and propelling the price towards $188.