Key takeaways
- SOL is trading above $160 after testing the $150 low on Tuesday.
- The coin could rally towards the $200 level soon amid growing demand and low supply.
SOL recovers from Tuesday’s slump
Solana’s derivatives market has not fully recovered since the October 10 deleveraging event, which liquidated over $19 billion in crypto assets within 24 hours. Data obtained from CoinGlass showed that the futures Open Interest (OI) averaged $17.63 billion on Wednesday, up from the $7.7 billion recorded on Tuesday.
The growing OI, representing the national value of outstanding futures contracts, suggests that retail investors are regaining interest in the cryptocurrency. A steady recovery in the OI will indicate a short-term bullish outlook. Otherwise, Solana’s recovery potential could remain limited.
Solana bulls eye short-term breakout
The SOL/USD daily chart remains bearish and inefficient as Solana has failed to break above the $200 psychological level in the near term. SOL is trading at $160 per coin at the moment as the broader crypto market recovers from the recent slump.
The Relative Strength Index (RSI) on the daily chart holds at 40, signaling a fading bearish trend. If the RSI moves above the neutral 50, SOL could rally higher towards the $188 resistance level in the near term. An extended bullish run would see SOL hit $200 for the first time since October 25th.
However, if the downtrend continues to dominate, SOL could drop below the $150 support level and retest the recent low of $144.
Conversely, the Moving Average Convergence Divergence (MACD) indicator on the daily chart is set to trigger a buy signal. This signal usually takes place once the blue line crosses and settles above the red signal line, encouraging investors to increase their risk exposure.
SOL could experience a 22% breakout from its current level, allowing it to hit the $200 psychological level.