Solana (SOL) has been on an incredible bull run over the last month, rallying over 172% from $21 to break above the key $60 resistance level. After breaking out from a Falling Wedge pattern, Solana surged to its highest price since May 2022 as buyers stepped in.
According to technical analysis from altFINS, Solana remains in a clear uptrend across the short, medium and long term timeframes. Momentum is strongly bullish, with the MACD line above the signal line. However, the Relative Strength Index (RSI) is now in overbought territory above 80, indicating the rally may be due for a pause or minor pullback.
The nearest support zone for Solana is around $47, which aligns with previous resistance from August. Below that, the $38 level marks the next key area of expected support. If the rally is to continue, bulls must defend these support levels.
Resistance is now found around $60 where Solana topped out briefly. Above that, the key test will be the $80 area, a price level not seen since May last year. With the RSI overheated, Solana may need to consolidate under $60 before a retest of $80.
Source: altFINS – Start using it today
In summary, while Solana’s upside momentum has been hugely impressive, its extremely overbought conditions suggest some potential pitfalls for traders. Setting price alerts on support and resistance zones can help monitor whether this rally has enough fuel left in the tank. Traders may look to buy a pullback given the bullish trend structure.
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However, when taking a longer-term view, it’s notable that Solana still remains far below its all-time high around $258 reached in 2021. This suggests there is plenty of room for further upside if bullish momentum returns.
Breaking above the current 2023 high around $60 would open the door for a retest of Solana’s ATH. Though overbought in the short-term, the altcoin could have much further to run over the longer term if key support holds during any cooldown period.
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