Despite the bearish sentiment sweeping across the cryptocurrency market, Solana (SOL) is showing strong potential for an upside rally. While many digital assets have experienced steep price declines, SOL has managed to consolidate around a critical support level of $125, fueling speculation of a price surge. Technical analysis and on-chain metrics suggest that this could be the calm before a major breakout for SOL.
Technical Analysis – Bullish Divergence Signals Upside Potential
At the time of writing, technical experts are highlighting Solana’s bullish price action. One of the most significant indicators is the Relative Strength Index (RSI), which has formed a bullish divergence. This pattern occurs when the price of the asset makes lower lows, but the RSI forms higher lows—an indication of weakening bearish momentum and a potential trend reversal from downtrend to uptrend.
Historically, when Solana has reached its current support level of $125, it has been followed by significant price surges. Based on this pattern, market analysts predict that SOL could see a potential price rally of up to 25%, pushing its value toward the $160 level.
Bullish On-Chain Metrics Support Positive Outlook
In addition to technical indicators, on-chain metrics from CoinGlass reinforce the bullish sentiment surrounding Solana. One of the key metrics is the Long/Short ratio, which currently stands at 1.103. A value above 1 generally signals that traders are optimistic, indicating more long positions than short ones in the market. This bullish sentiment is further supported by Solana’s open interest, which has risen by 3% in the last 24 hours and consistently increased over the past three days.
A combination of rising open interest and a bullish Long/Short ratio suggests that investors are positioning themselves for a potential price surge. This uptick in open interest often points to increased trader activity, potentially setting the stage for significant market moves.
Liquidation Levels Signal High-Stakes Trading
While bullish signals dominate the narrative, traders should be aware of key liquidation levels. According to CoinGlass data, the critical lower liquidation level is near $125, while the upper level sits at $131. If SOL’s price drops to $125.61, approximately $56 million worth of long positions could be liquidated. Conversely, if SOL pushes past $131, about $25 million in short positions will be liquidated.
Also Read: Solana’s SOL is Defying the Odds – Price Holds Strong Despite 42% Trading Volume Plunge
As of now, Solana is trading around $130.40, having experienced a 2.5% price increase in the last 24 hours. However, trading volume has dropped by 65%, suggesting reduced market participation, possibly due to the recent price drop.
With SOL consolidating near critical support levels and bullish technical and on-chain metrics signaling a potential rally, the cryptocurrency appears poised for a breakout. The next few days will be crucial, as traders keep a close eye on the $125 and $131 levels. Should the bullish sentiment hold, Solana could be heading toward a 25% price surge, making it a coin to watch in the coming weeks.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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