2023-12-2 16:00 |
Cryptonary, a pseudonymous crypto analyst, remains cautiously bullish on Solana (SOL) despite some concerning on-chain metrics. In a recent Twitter thread, they argued that while SOL looks poised for a breakout above key resistance at $61, the growing number of shorts indicate bears are betting on a breakdown soon.
Bears Piling on Shorts While Longs DeclineAccording to Cryptonary, open interest in SOL recently hit $850 million, nearing its yearly high of $933 million. However, over the past 8 hours, the open interest-weighted funding rate has slid from 0.016% down to 0.010% even as open interest rises.
As Cryptonary explained, “The Long/Short ratio is 0.9631, indicating more participants have piled into Shorts than Longs. It is a very different setup from BTC and ETH.” With shorts outweighing longs while funding slides, it seems clear traders are positioned for SOL to fall through support.
Crucial Resistance Holds the Key for SOL’s Next MoveCurrently SOL is pressing up against resistance at $61. As Cryptonary noted, “SOL is really on the cusp here; a break above $61 could see a meaningful breakout higher to $69 and even $80.”
However, they cautioned that the move could go the opposite way, saying “these Shorts may be vulnerable to a squeeze, particularly if SOL breaks out of $61.” A breakout could trigger a short squeeze and push SOL sharply higher. Yet if $61 fails to hold, the influx of shorts could accelerate a breakdown for the token.
Cautious Optimism Despite Warning SignsWhile noting concerning signs like bearish RSI divergences on higher timeframes, Cryptonary ultimately struck an upbeat note on SOL: “We’ll add to our long-term bags if SOL can pull back to $52 with light DCA Spot buys. If SOL pulls back to $48, we’ll be even more aggressive with our DCA Spot buys down to the low $40s.”
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The post Solana Analyst Remains Bullish Despite Concerning On-Chain Metrics, as SOL Bears Aim to Breakdown This Crucial Resistance appeared first on CaptainAltcoin.
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