Solana has surged 25% from its recent four-month low of $110, showing a notable rebound. However, market data presents mixed signals as bulls strive to sustain the recovery.

During the latest market downturn, which saw Bitcoin drop 5% below $50,000 for the first time in nearly six months, Solana experienced a volatile period, recording a 40% decline over the past eight days.

The last time Solana faced a similar daily losing streak was in March 2023, leading to a collapse to $16. However, recent market activities indicate a potential recovery path for Solana.

Solana Retests $140

The daily chart reveals that Solana reclaimed the $140 mark earlier this morning, climbing to $144. This recovery suggests strong bullish sentiment but has seen mild corrections. Solana is up 7% in the past 24 hours and is trading at $140 at the time of writing.

Market analyst Kaleo confirmed Solana’s strength against Bitcoin, noting that the SOL/BTC ratio shows Solana outperforming Bitcoin in the current recovery phase. Kaleo suggests that a ratio of 0.01 is a strong target.

Really impressed with Solana’s strength vs Bitcoin today. Only a matter of time before this ratio sends to new highs. 0.01 is a magnet.

Additionally, the daily Accumulation/Distribution metric on the SOL chart shows a rising trend. This indicates more investors are accumulating Solana, a positive sign for potential upward momentum, with the metric currently at 297.43 million SOL.

Bearish Momentum Remains Prevalent

The Directional Movement Index (DMI) presents a mixed outlook. The positive directional indicator (+DI) has dropped to 15.08, indicating a slump in buying pressure. In contrast, the negative directional indicator (-DI) has increased to 35.83, confirming that the bears have maintained the selling pressure.

Notably, the Average Directional Index (ADX), which measures the strength of the trend, stands at 28. A high ADX above 25 suggests a strong trend, meaning that the bearish pressure has continued to outpace the recent bullish momentum.

Trader JohnnyB believes Solana’s downturn might not be over yet. He anticipates another drop before a full recovery and 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.

Looking ahead, Solana’s current position warrants cautious optimism. The accumulation phase indicated by the A/D metric suggests that investors are confident in Solana’s recovery. However, the positions of the DMI indicators show that the bullish momentum has not yet overcome the selling pressure.

Solana has already recovered the $132.68 level, flipping it from resistance to support. If the bullish momentum gains steam, the bulls could mount a rebound toward the 20-day SMA at $167.07. However, a weakening bullish push might revisit the $132 support, which, if breached, could bring the $124.85 defense into the picture.

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