Solana Surges Over 60% in October but Faces Resistance at $40
The cryptocurrency Solana (SOL) has seen a remarkable comeback over the past month, rising over 60% in October according to data from Santiment. This price increase has propelled Solana back into the top 10 cryptocurrencies by market capitalization, now sitting at #7.
Santiment reports that discussions about Solana have also been increasing across social media and online forums. Rising interest and volume in a cryptocurrency is often a bullish sign for future price appreciation.
However, technical analysis firm altFINS cautions that this rapid price increase has left Solana overextended and overbought. Indicators like the Relative Strength Index (RSI) are flashing warning signs of being in overbought territory.
Source: altFINS – Start using it today
altFINS notes the bullish breakout from a falling wedge pattern that sparked this Solana rally. But with the RSI above 80, they believe a pullback or consolidation is likely before Solana can make another leg higher.
The key support zone to watch according to altFINS is the $25 to $30 area, which previously acted as resistance. If Solana falls back to this zone, it could present another buying opportunity before rallying higher.
Upside potential seems limited in the short-term, with altFINS pointing to strong resistance around $40.
While Solana’s fundamentals and developer activity remain strong, its technicals suggest limited upside in the very near-term until the cryptocurrency cools off from its overheated rally. But any pullback that retests support could provide another entry point for investors with a bullish long-term outlook.
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