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- SOL did not show strong signs of fatigue in the higher period charts.
- There was attractive liquidity near $100 for Solana to test again.
Solana (SOL) continues its upward trend during the festive season, giving holders an additional reason to celebrate. From a low of $71.78 on December 19, SOL rose more than 57% in less than six days.
AMBCrypto noted in its previous analysis that resistance at $96.45 would be a good place to book profits, while $103-$106 could act as resistance.
SOL bulls blew these expectations out of the water by rising to $115 last week.
Psychological $100 may become important again.
Source: SOL/USDT on TradingView
The 200% Fibonacci extension level has been tested as resistance over the past 24 hours. It was unclear whether SOL would be forced to step down from this.
The RSI on the 12-hour chart is at 81, but no bearish divergence has yet formed on the 12-hour or 1-day charts.
On the other hand, on the 4-hour chart, although this divergence has occurred in the last 24 hours, it does not guarantee a bearish reversal in the coming days.
SOL’s trend is firmly bullish, so buyers may want to wait for a decline before entering a long position. OBV is also trending upward, indicating that buyers are in control.
The $96 area, shown in light blue, served as a sub-consolidation zone on December 23rd. The psychological level was also close to $100. So there was potential for a pullback into this area before the rally continued.
Bulls can be overextended
Source: Hiblock
Over the past 48 hours, SOL has formed an extended short-term range from $109 to $116.8. During this period, cumulative Liq level delta was very high.
The inference was that bulls were expecting more upside and the majority of the market was in a long position.
This means that initiating liquidations during a price decline can provide SOL with a lot of liquidity to fuel the next uptrend.
AMBCrypto’s analysis reveals that the $103-$106 area is important both from a technical chart and Liq level perspective.
Read Solana (SOL) Price Prediction for 2023-24
It holds multiple long positions estimated to be liquidated at more than $60 million. Likewise, $97-$100 has also been estimated to have multiple $20M+ liquidation levels.
So while a pullback in this area is not guaranteed, it could present a buying opportunity.
Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the author.