Following a healthy price correction, the broader cryptocurrency market is showing signs of an upward trend. Amidst this market movement, Solana [SOL], the world’s fifth-largest cryptocurrency, is displaying bullish behavior and appears set for a significant upward rally.
Analysis of Solana’s Technical Indicators and Key Levels
According to the technical analysis provided by CryptoCrypto, SOL has effectively tested the breakout point of a bullish double-bottom pattern and is on its way towards the $165 mark.
Furthermore, on the daily time frame, SOL seems to be finalizing a bullish inverted head-and-shoulders pattern. The completion of this pattern is contingent upon SOL reaching the $165 threshold.
There is a high likelihood that SOL could breach the $165 mark in the near future. Additionally, another bullish pattern indicates a substantial upward surge once SOL breaks above the neckline of the inverted head-and-shoulder pattern at $165.
If this scenario plays out as anticipated, SOL could potentially reach the $185 level in the days ahead. Investor sentiment appears positive, further fueling this outlook.
Bullish On-Chain Metrics
An on-chain analytics firm has lent support to SOL’s positive trajectory. Coinglass reports that SOL’s Long/Short ratio over the four-hour timeframe currently stands at 1.089, indicating a prevalent bullish sentiment among traders.
Moreover, SOL has seen a 2.9% uptick in open interest within the last four hours, with a consistent upward trend. Rising open interest signifies an increase in trading activity as SOL continues its successful retest of the recent breakout level.
In the cryptocurrency sphere, heightened open interest and a Long/Short ratio exceeding 1 are typically viewed as bullish signals, prompting traders to establish long positions based on this data.
Significant Liquidation Thresholds
Presently, major liquidation levels are identified at $149.5 on the downside and $154.6 on the upside, indicating traders’ over-leverage levels at these points, according to Coinglass data.
If the current sentiment persists and the price climbs to $154.6, approximately $15.67 million worth of short positions could get liquidated.
Conversely, a shift in sentiment leading to SOL’s price drop to $149.5 could result in the liquidation of around $33.28 million worth of long positions.
By combining these on-chain metrics with technical analysis, it appears that bulls are in control of SOL and are likely to sustain its upward momentum.
At the time of writing, SOL was hovering around $153.8, registering a 1.1% price surge over the past 24 hours. During the same period, trading volume decreased by 12%, indicating reduced trader participation.
Nevertheless, there has been a steady uptick in volume post the successful retest, suggesting renewed interest in trading activities.