SOL’s 120% price surge in 2 weeks: A long-term trend or a short-lived spike?

SOL is on a roll! 

The Solana cryptocurrency has been soaring, with a 60% increase since the start of the year. But it looks like the party may be winding down, as signs of exhaustion are showing. Keep an eye out for a possible short-term dip in the near future.

SOL’s comeback story in 2023

After taking a hit in 2022, SOL is back on top as one of the best-performing crypto coins this year. The price soared to new heights of $19.50, an impressive 120% increase from its low of $8 in December 2022.

But hold on tight, as the coin may be getting a bit too hot to handle with an overbought RSI reading above 70, as seen above.

SOL’s RSI is reaching for the sky, but is it time to sell?

Traditional investors may see an overbought RSI as a sign to cash out, as it usually means that buyers have run out of steam. So, SOL’s price may be headed for a little cool-down period or a sideways move to bring that RSI reading back to below 70.

Referencing the above graph, should we focus more on the red-on-green lines?

If SOL’s price cools down, the next stop could be its 50-day exponential moving average, or EMA (the red wave), at around $14.50. But, if the sell-off continues, the price could drop even further to its 20-day EMA (the green wave) at around $13.35, which would be a 20% correction.

What’s next for SOL?

SOL’s long-term strategy is to break free from the shackles of its $17.50 resistance level, which kept it in check during April-July 2021. 

If it manages to do so, traders may start buying, pushing the price toward a resistance of $25. But if SOL fails to overcome this resistance, it could find itself back down at $8, taking into account the negative fundamentals of the Solana ecosystem.