Solana (SOL) price has shown promising bullish momentum, reaching near key resistance levels, especially the 1.618 Fibonacci extension. As of the latest data, Solana is hovering around $216.50, reflecting a 1.32% increase over the past 24 hours.
While market activity and investor interest remain strong, technical analysis suggests a correction may be imminent.
Solana’s recent rally has seen the price surge towards the $220-$232 range, pushing beyond the 100% Fibonacci extension. The price action is currently testing the 1.618 extension at approximately $222, which could act as a short-term resistance point.
However, this level might also mark the end of a corrective wave. The larger trend is part of a continuing upward movement, and the recent consolidation phase, labeled as A-B-C, hints that Solana could experience a pullback before any further gains.
Alongside the price movement, Solana’s market cap stands at $104.56 billion, with a 24-hour trading volume of $2.5 billion, recording an increase of 4.61%.
The liquidity remains ample, with a supply of 482.99 million SOL out of a total circulating supply of 591.6 million SOL. Still, the approaching resistance levels and overbought conditions may set the stage for a price correction.
RSI and potential for overbought conditions
The Relative Strength Index (RSI) currently stands at 64.04, nearing overbought territory, which typically signals that the market may be due for a price correction.
The RSI, a momentum indicator, suggests that while the rally has been strong, buying strength may be starting to wane. If the RSI crosses the overbought zone (above 70), it could signal a more significant pullback, which traders should prepare for.
MACD shows mixed momentum for Solana
The Moving Average Convergence Divergence (MACD) shows a positive divergence, with the MACD line above the signal line. This indicates that the current bullish trend remains intact.
However, the narrowing gap between the MACD and signal lines suggests upward momentum might be slowing.
Moreover, as the histogram is green, investors should pay attention to any signals for the MACD crossover, indicating the weakening of the purchase signals.
