Despite the prevailing pessimistic market sentiment, Solana [SOL] seems ready for a significant upward surge driven by its bullish price patterns and robust on-chain data. Over the past few days, even amidst a noticeable downturn in the cryptocurrency market, SOL has been consolidating near a critical support level of $125.
Analysis of Solana’s Technical Indicators and Future Levels
According to expert analysis, SOL exhibited a bullish trend currently. The Relative Strength Index (RSI) has shown a bullish divergence, indicating a possible shift from a bearish to a bullish trend.
This divergence occurs when the asset’s price continues to form lower bottoms while the technical indicator shows higher bottoms over the same period.
Historical price movements suggest that whenever SOL touches its current support level, it tends to witness a substantial price surge. With the current bullish momentum, there is a strong likelihood that SOL’s price could rise by 25% to hit the $160 mark.
Upbeat On-Chain Data Metrics
Analysis of CoinGlass’s SOL Long/Short ratio chart reflects positive market sentiment. The current ratio stands at 1.103, indicating traders have a bullish outlook (a value above 1 signifies optimism).
Simultaneously, SOL’s open interest has risen by 3% in the last 24 hours and has been steadily increasing over the past three days.
The combination of growing open interest and a Long/Short ratio exceeding 1 points towards a potential buying opportunity, often utilized by traders to establish long and short positions.
As per CoinGlass data, significant liquidation levels are currently around $125 on the downside and $131 on the upside, suggesting traders are highly leveraged at these points.
If the bullish sentiment diminishes and SOL’s price drops to $125.61, approximately $56 million worth of long positions will be liquidated. Conversely, if the sentiment remains bullish and the price hits $131, about $25 million worth of short positions will be liquidated.
Current data indicates that the bulls are in control, with a strong potential to trigger the liquidation of short positions.
SOL is presently trading near $130.40, having experienced a price increase of over 2.5% in the last 24 hours. However, trading volume has decreased by 65% during the same period, indicating reduced trader activity following the recent price decline.