Solana (SOL), the sixth largest cryptocurrency by market cap, is poised for a massive upswing on the strength of its strong breakout and on-chain indicators on September 20, 2024. After struggling for nearly three weeks, SOL broke out of the consolidation zone and is now starting to move towards the $165 level again.
SOL sets another record
Today, it has more than 75 million monthly active addresses. This surge is indicative of the network’s growing popularity, especially in areas such as developer and user activity in the decentralized applications (dApps), DeFi, and NFT sectors.
As Solana activity increases, the platform further distances itself from the rest as it remains one of the most scalable and efficient blockchains in existence.
Despite the positive momentum, recent market activity has been volatile for Solana. On September 18, Solana experienced $121,000 in short liquidations and nearly $3.2 million in long liquidations, with the majority of BAn’s long positions being liquidated. The large number of liquidations of long positions suggests that traders may be cautious about Solana’s near-term price action.
Solana Technical Analysis and Upcoming Levels
At press time, SOL is trading near $142, with prices up more than 10% in the past 24 hours. Its trading volume has grown by 31% over the same period, indicating increased participation from cryptocurrency enthusiasts amid the recent breakout.
SOL looks bullish and in an uptrend as it is currently trading above the 200 exponential moving average (EMA) on the daily timeframe. The 200 EMA is a technical indicator used by investors and traders to determine whether an asset is in an uptrend or a downtrend.
Although the price is currently holding around $141.5, it still needs to close above $141.5 otherwise the breakout will not be considered a success. If that happens, there are high chances that it will surge 15% to the $165 resistance level in the coming days.
SOL's on-chain indicators are bullish
In addition to this breakout, on-chain indicators such as SOL’s long-short ratio, future open interest, and OI-weighted fund rate also sent bullish signals
Coinglass’s long-short ratio currently stands at 1.02 (values above 1 indicate bullish sentiment). Meanwhile, its future open interest has increased by 13% over the past 24 hours and has been rising steadily.
The rise in open interest shows that bulls are betting more on long positions than short positions. As of now, 51% of the top traders hold long positions, while 49% hold short positions. These data show that bulls have returned to the market and are currently dominating the asset.
Typically, traders and investors use the combination of an increase in open interest and a long-short ratio above 1 to enter a long or short position.
In simple terms
Solana’s long/short ratio is currently at 1.02, indicating bullish market sentiment. Meanwhile, SOL futures open interest has increased by 13% in the past 24 hours and has been rising steadily. If SOL closes above $141.5 on a daily basis, it could rally further by 15% to the $165 resistance level.
