Solana retests $140 amid 25% rebound: can bulls recover?

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As a seasoned crypto investor with a knack for spotting trends and riding the waves of market volatility, I find myself intrigued by Solana’s recent performance. After experiencing a tumultuous period during the latest market-wide downturn, it’s encouraging to see Solana rebounding and testing the $140 mark once again.

As a crypto investor, I’m observing a remarkable surge in Solana’s value, which has climbed approximately 25% from its four-month low at $110. This uptick is part of an impressive rebound that we’re witnessing. However, market data presents mixed indications as the bulls strive to sustain this recovery momentum.

Over the last eight days, I’ve observed a rather turbulent phase for Solana (SOL), with its value plummeting by an impressive-yet-daunting 40%. This steep drop comes amidst the recent market-wide selloff that dragged Bitcoin (BTC) down below the $50,000 mark for the first time in nearly half a year.

Previously, Solana experienced a series of daily losses reminiscent of those seen in March 2023, resulting in a drop to $16. Yet, the most recent market fluctuations suggest that Solana is embarking on a journey towards recovery.

Solana retests $140

As a researcher, I’ve been tracking Solana’s performance, and this morning, it regained the $140 mark before soaring to $144, indicative of a robust bullish trend. However, it has experienced minor corrections along the way. At the time of writing, Solana is up 7% over the past 24 hours, trading at approximately $140.

Solana retests $140 amid 25% rebound: can bulls recover?

Market expert Kaleo affirmed Solana’s robustness compared to Bitcoin, even as the original cryptocurrency sparked a recent bounce-back. In the ongoing recovery period, data from the SOL/BTC ratio suggests that Solana is outpacing Bitcoin in performance.

Absolutely captivated by Solana’s performance compared to Bitcoin right now!

— K A L E O (@CryptoKaleo) August 5, 2024

Kaleo notes that Solana’s strength against Bitcoin is impressive, with the SOL/BTC ratio poised for new highs. He suggests that a ratio of 0.01 is a strong target. 

As an analyst, I’ve observed a consistently increasing trend in the Daily Accumulation/Distribution metric on the Solana (SOL) chart, suggesting that more investors are accumulating this cryptocurrency. This is a positive indicator of potential upward price movements, as the current reading stands at approximately 297.43 million SOL.

Bearish momentum remains prevalent

Concurrently, the Directional Movement Index (DMI) shows a conflicting perspective. The upward momentum (+DI) has decreased to 15.08, suggesting a decline in buying activity. On the flip side, the downward momentum (-DI) has risen to 35.83, signifying that sellers continue to exert pressure on the market.

Remarkably, the Average Directional Index (ADX) currently reads 28, indicating a robust trend. An ADX higher than 25 typically signals a strong trend, implying that the ongoing bearish influence is significantly stronger than the current uptrend.

Trader JohnnyB believes Solana’s downturn might not be over yet. He anticipates another drop before a full recovery. He views this potential drop as a “generational buy opportunity,” implying that the upcoming dip could present a favorable entry point for long-term investors. 

It looks like we are going to get one more generational buy opportunity in $SOL — JohnnyB (@johnnybtrader) August 4, 2024

Moving forward, Solana’s present standing lends support to a carefully optimistic outlook. The buildup as shown by the A/D metric implies that investors have faith in Solana’s resurgence.

In other words, while the DMI indicators suggest that buying strength is on the rise, it hasn’t overcome the existing selling pressure just yet.

Solana has now transformed the $132.68 barrier from a resistance point to a support level. If the positive trend continues to build strength, it could lead to a recovery up to the 20-day Simple Moving Average (SMA) at around $167.07. Conversely, a waning bullish pressure might cause a dip back to the $132 support. Should this level be broken, the focus may shift towards defending the lower price point of $124.85.

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2024-08-06 13:02