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While the rest of the crypto market has been basically flat over the last week, Solana has been pumping to the moon. The DeFi platform’s native cryptocurrency, SOL, has surged into the top-10 with weekly gains of 52 percent.
On the charts, the alt has maintained its upward trend following a bull flag breakthrough that peaked at $130. However, a corrective phase appeared to be in force at the time of publication, and SOL must maintain steady ship before the next upcycle.
SOL was trading at $108.46 at the time of writing, down 8% in the previous 24 hours.
Solana 4-hour Chart
SOL’s explosive run from $43 to a swing high of $82 and subsequent drop to $66 were used to sketch a few key Fibonacci Extension levels. The 100 percent Extension level, which is supported by the 20-SMA, has the potential to initiate a new round of buying pressure.
A deeper retracement would focus attention on the 61.8 percent mark. A level that has already acted as a foundation for purchasing activity. Any advance towards the 50 percent and 38.2 percent marks, on the other hand, would entice short-selling.
SOL’s next aim was the 200 percent Extension, which was now trading at $143.56. However, before making such a step, SOL must first bargain with the selling pressure. A few tall red bars lined up on its chart, indicating substantial profit-taking in the previous two sessions. Buyers must be cautious from here to avoid a slide below the 61.8 percent Fib mark.
Each of SOL’s indicators took the heavy wave of selling pressure into account. Nonetheless, it traded above important levels. For example, the RSI experienced a dramatic decrease from the overbought zone and was approaching the half-line. Traders should not be concerned about a stronger downturn as long as the RSI remains above 45-40.
After creating its greatest ever peak, the Awesome Oscillator also registered four red bars. As a result of selling pressure, the -DI was creeping closer to the +DI line on the Directional Movement Index. However, a crossover had not yet occurred.
Considering the aforementioned signals, SOL has the advantage to continue its upwards run as long as the indicators remain in favorable positions. Failing to do so would pave the way for an extended sell-off.
Because SOL is attempting to reduce its present losses, traders have an opportunity to buy the alt before its next upcycle. The 100 percent Extension level would be an excellent entry point for bullish traders, especially as it is supported by the 20-SMA.
The take-profit level of $143.56 is the 200 percent Fibonacci Extension. Short sellers, on the other hand, require SOL to close strongly below its 20-SMA in order to profit from the situation.