- Solana is showing strong signs of recovery, currently trading above the key $150 support with potential to reach $180 if bullish momentum continues.
- However, traders should be cautious of a possible pullback if SOL fails to close above critical resistance levels, risking a return to April lows near $105.
Solana Recovery Gains Momentum as US-China Talks Spark Optimism
Solana (SOL) is making a notable comeback, rallying over 1.5% on Monday after three consecutive days of gains. This upward movement coincides with the much-anticipated second round of US-China trade talks, which have injected fresh optimism into the crypto markets. SOL’s recovery has triggered increased activity in derivatives trading, with Open Interest (OI) climbing significantly alongside rising buy volumes — all signs pointing to a bullish outlook if the momentum sustains.
Breaking Through Key $150 Support – The Road to $180
At press time, Solana is trading around $154, having pushed past the critical psychological support level of $150. This marks a strong reversal following a sharp 5.85% dip just days earlier. The recovery has now extended Solana’s streak to four bullish candles in a row, resulting in a gain of more than 7% since the recent low.
Also read: Bitcoin Surges Past $107K as US-China Trade Talks Resume in London — Market Rally Boosted by Whale Activity
Technically, Solana’s ability to hold above $142 — a vital support aligned with the 23.6% Fibonacci retracement from January’s peak ($261) to April’s bottom ($105) — is crucial. Should SOL manage to close above $157, the highest weekly close so far, it could trigger further gains toward $180, near the 50% Fibonacci retracement level.
Supporting this bullish view, the Relative Strength Index (RSI) has bounced off oversold territory and sits at 45, signaling weakening bearish pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is nearing a bullish crossover, hinting at a potential new upward trend. Traders, however, are advised to wait for confirmations above key thresholds to avoid false signals.
Derivatives Market Signals Growing Bullish Confidence
Solana’s recovery isn’t just showing up in spot prices — derivatives markets are heating up too. Open Interest in SOL derivatives surged by 2.2% in the last 24 hours, hitting $6.55 billion. This reflects increasing capital inflows and bullish sentiment among traders.
The OI-weighted funding rate flipped positive at 0.0053%, indicating that bulls are paying a premium to bears to keep swap prices aligned with the spot market. Additionally, short liquidations surged to $5.12 million compared to $1.77 million in long liquidations, signaling that bearish positions are being aggressively closed out.
The SOL Long/Short ratio over the past 4 hours stands at 1.3861, with nearly 58% of trading volume coming from long positions — a clear sign of bullish dominance in Solana derivatives.
Watch for the Dead Cat Bounce Risk
Despite the encouraging signs, traders should remain cautious. Failure to maintain a close above $157 could prompt Solana to retest support levels at $142 and possibly $140. Falling below these could extend the decline to April’s lows near $105, presenting a “dead cat bounce” risk — a temporary recovery before another drop.
Solana is on the verge of a meaningful recovery, with technical indicators and derivatives markets signaling bullish momentum. But watch closely: holding above $150 and clearing $157 will be key to confirming the next leg up toward $180, while a failure could see SOL testing deeper support levels again.
