Over the last 24 hours, Solana (SOL) experienced a significant move beyond a crucial level, yet it still faced a strong resistance area.
Although technical indicators indicated bullish momentum, the trading volume remained relatively low despite consistent buying pressure.
Long-term investors will be pleased to know that Solana’s network metrics outshine those of Ethereum (ETH), hinting at potential substantial market capitalization growth in the upcoming months.
Predicting Solana’s Price Movement: Exercise Caution in the Short Run
Highlighted in a previous analysis, the $154 level held critical importance as it represented the midpoint of the long-term range and the 50% retracement level from SOL’s March rally.
While this level has been breached three times since August, the last two attempts to surge were halted around the $162 resistance level.
A similar outcome could be anticipated with the current move. There appears to be a substantial liquidity pool within the $162-$165 range, potentially triggering a bearish reversal.
Despite the bullish momentum, the Money Flow Index (MFI) struggled to surpass 72, even as the price reached new local highs, signaling a possible impending price correction.
The Choppiness Index skyrocketed over the past three days, hitting above 61.8 as Solana faced challenges in breaking the $154 barrier. Although a decline has started, the indicator suggests that a strong trend is yet to materialize.
Steady and Gradual Buying Patterns
The Open Interest remained close to monthly highs, indicating heightened activity within the futures market and reflecting a generally positive short-term sentiment.
The spot Cumulative Volume Delta (CVD) interrupted the mid-September downtrend and has been steadily rising over the last week. The sluggish spot demand may signify that overcoming the $162 hurdle could be a gradual process.
The overall cumulative liquidity levels remained positive, suggesting a possible minor price decline akin to what occurred on Thursday, with potential support levels at $155 and $152 in such a scenario.
A sustained drop below $146 would indicate a short-term bearish trend, yet long-term price projections for Solana remained optimistic, especially on higher timeframes like the weekly.
Disclaimer: The views expressed do not constitute financial, investment, or trading advice; they are solely the author’s personal opinion.