Raydium (RAY), the native token of Solana-based decentralized exchange Raydium, has delivered an impressive rally in recent days, gaining nearly 65% over the past week. After retesting its support near $2.20 earlier this month, the token has climbed steadily, surpassing a key technical level at $2.85 and flipping its daily market structure bullish. This move has strengthened bullish sentiment among investors, with many now eyeing the psychological $4 level as the next significant milestone.

However, while momentum remains broadly positive, some caution may be warranted. Technical indicators suggest that Raydium’s current rally could face short-term resistance near the $4 level, with the potential for a temporary pullback if demand weakens or momentum falters.

The rally began in earnest after RAY successfully rebounded from the $2.20 support zone, which had previously acted as a strong foundation following a sharp decline earlier in May. This retest was followed by a breakout past the $2.85 mark—a former lower high set in early March. This move marked a bullish shift in Raydium’s daily price structure and confirmed renewed upward momentum.

Despite the structural breakout, analysts have pointed out signs of potential divergence. The Awesome Oscillator, a momentum-based indicator, has not matched the price action with a corresponding higher high. In contrast, while the price broke above $2.85 and continued climbing, the oscillator’s failure to reach new highs indicates weakening bullish momentum. Such bearish divergence on the daily timeframe can be an early sign of a slowing rally, particularly as the token approaches a well-established resistance level like $4.

Adding to this cautious outlook is the behavior of the Chaikin Money Flow (CMF), a tool used to gauge capital inflows and outflows. On the daily chart, the CMF remains above +0.05, suggesting buying pressure is still present. However, on the 4-hour chart, the situation is less encouraging. The CMF on the lower timeframe had dipped to -0.26 just 36 hours prior to press time and was recorded at -0.02 at the time of writing. These readings imply that while the overall trend remains bullish, short-term demand from buyers may be weakening.

Further insights from derivatives data support the idea of short-term speculative interest. Data from Coinalyze shows that Open Interest in Raydium futures surged significantly, rising from $7.8 million to $11.26 million as the token pushed past the $3.20 resistance. This increase suggests growing investor participation, with many traders positioning for a continued rally.

The Funding Rate has remained positive, reinforcing the notion of bullish sentiment in the short term. When combined with rising Open Interest, a positive Funding Rate generally indicates that traders expect further price appreciation. However, as with many rallies driven by derivatives and short-term speculation, the sustainability of the move will depend heavily on whether fresh demand can follow through—particularly as RAY approaches major resistance.

Currently trading just above $3.70, Raydium is within striking distance of the $4 level. This price point is considered both a psychological and technical resistance area. A successful breakout above $4 could pave the way for additional gains and solidify the current uptrend. However, given the presence of bearish divergence on the daily chart and weakening demand on shorter timeframes, there is a growing possibility that RAY may face rejection or consolidation before attempting another move higher.

In summary, Raydium has shown strong performance in recent days, with both retail and institutional interest helping to drive its bullish breakout. However, a combination of technical divergence and declining short-term buying pressure suggests that a pullback or temporary pause in momentum is possible as the token tests the $4 barrier. For now, traders and investors will be watching closely to see whether RAY can overcome this key resistance or if it will need to consolidate before making its next move.