Key Takeaways

• The ‘Solana Summer Crypto Exploration’ is in full swing, with SOL stabilizing around $145, with $150 acting as a key resistance level in the current trend.

• TD Sequential buy signals on the daily chart indicate a potential bullish reversal.

• Derivatives volume surged 65.11%, with $50.62 million in short liquidations, pointing to growing volatility and possible upward pressure.

• Technical indicators are mixed. RSI and MACD suggest caution, while the TD Sequential and rising volume offer hope for bulls.

• A confirmed breakout above $150 with strong volume could lead to a rally toward $160 or more.

TD Sequential Indicator Sparks Reversal Hopes

One of the most notable developments in this Solana summer journey is the TD Sequential indicator flashing a buy signal on the daily chart. Historically, this pattern has been a strong indicator of potential market reversals.

According to crypto analyst ‘Ali Chart’, the TD Sequential’s buy signal comes at a critical juncture, just after Solana’s dip below $150. This could be a sign that selling pressure is weakening, opening the path for a potential rebound.

Still, traders are advised to wait for confirmation signals such as increased volume and sustained upward momentum. Without these, the risk of a false breakout remains high.

Rising Derivatives Volume & Short Liquidations Fuel Momentum

Fueling the optimism of the Solana Summer Crypto Exploration is a sharp rise in derivatives market activity. According to CoinGlass, Solana’s derivatives volume jumped by over 65%, indicating renewed interest and speculative positioning.

Alongside this, short liquidations hit an eye-catching $50.62 million, a clear sign that bearish traders were caught off-guard. As short positions get liquidated, the resulting buybacks create upward pressure on price, a phenomenon often referred to as a short squeeze.

SOL Liquidations

Source: CoinGlass

However, this also brings a note of caution. While the surge in liquidations supports bullish momentum in the short term, an overcrowding of long positions could spark a price correction if sentiment suddenly shifts.

Mixed Technical Signals Point To Uncertainty

Despite these bullish signals, Solana’s technical indicators paint a mixed picture.

• The Supertrend Indicator recently turned bearish after a 5% drop, suggesting downward pressure as SOL trades below the trendline.
• The Relative Strength Index (RSI) sits at 37, a level that typically points to bearish sentiment, especially as the price nears the $140 support zone.
• Meanwhile, the MACD (Moving Average Convergence Divergence) is hovering in the negative territory, with red histogram bars indicating momentum is still favoring the bears.

The Vital $140 Support Level

If SOL fails to hold the $140 support, analysts warn that it could revisit $105, marking a potential retest of its yearly low.

SOL/USD

Source: TradingView

That said, the RSI had recently spiked above 70 before retreating, a sign that the asset might be undergoing healthy consolidation rather than a full reversal. If momentum picks up again, especially with support from volume, the path toward $160 remains open.

FAQ

What is the “Solana Summer Crypto Exploration”?

Solana Summer Crypto Exploration refers to the renewed interest and trading activity surrounding Solana during the summer months, fueled by price movements, technical signals, and broader market participation.

Is the TD Sequential indicator reliable for Solana?

The TD Sequential indicator is widely used by traders to identify potential market reversals. In Solana’s case, the recent buy signal may indicate that bearish momentum is fading, but it should be confirmed with volume and price action above $150.

What does a breakout above $150 mean for Solana?

A breakout above $150 could signify a shift in market sentiment. If confirmed by strong volume, it may pave the way for a rally toward $160 or higher, making it a key level to watch during this Solana summer rally.

Should I be cautious about short liquidations?

Yes. While short liquidations can push the price higher, excessive long positioning following the squeeze can lead to sharp corrections. It’s crucial to monitor market sentiment and volume trends.

What are the downside risks for Solana?

If Solana fails to hold the $140 support, it could continue to slide toward $105, which is its lowest closing level this year. Bearish technical indicators like the MACD and RSI are key tools to watch in this scenario.