Solana’s TVL Surpasses Expectations; Attracts Crypto Enthusiasts’ Attention

Solana’s TVL Surge

Solana’s recent surge in Total Value Locked (TVL) has garnered significant attention in the crypto space. This surge, reaching an impressive high of $338.82 million in 2023, indicates a renewed interest in the Solana ecosystem.

However, market analyst Ran Neuner’s comment on X expresses the sentiments of many in the community who have taken note of this sudden surge. A comparison of this asset’s TVL to its earlier performance shows a 38% increase. It was about $211 million as of January this year.

Also, it has increased by approximately 4.16% over the last 24 hours, moving from $325 million to $339 million. Despite this surge, data shows that SOL’s price still lags behind its YTD highs.

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Historical Perspective And Concerns

Solana’s TVL has recovered remarkably since January 2022, after dropping by 60% on January 1, 2022, and further decreased to around $4.38 billion on May 15, 2022. Many analysts attributed the decline in TVL to the prevailing bearish trends in the decentralized finance (DeFi) sector.

However, in the last 30 days, the TVL of prominent DeFi platforms within the Solana ecosystem, such as Solend and Tulip, recorded notable declines, declining by over 8% and 11% in TVL, respectively. In addition, Marinade Finance and Serum, specializing in staking and decentralized exchanges, recorded substantial drops of over 48% and 42% in their TVLs.

Various dApps like Francium, Atrix, Orca, Quarry, Raydium, Saber, and Mango Markets also experienced a decline in Total Value Locked. Despite this substantial dip of over $6 billion last year, Solana retains its position as the fourth blockchain with the highest value locked in 2022, surpassing that of other notable platforms like Polygon, TRON, and Cardano.

Meanwhile, the court-approved liquidation of the FTX estate, holding approximately $1.2 billion worth of SOL, adds an element of uncertainty to SOL’s price action.

Crypto analytics platform, DeFi Squared, opined that SOL’s price struggle is nothing new among crypto assets. According to them, the dynamics of supply and demand and various external factors can lead to unexpected market reactions.

Analyzing SOL’s Possible Price Movement

An analysis of SOL’s technical indicators shows that the $24.50 price level is the asset’s next crucial resistance. This region represents a consolidation phase and a potential area of interest for traders and investors.

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Meanwhile, SOL’s price above the 23.6% Fibonacci retracement level indicates a positive outlook. The immediate resistance at $24.50 represents a crucial level to watch.

A successful breach of this resistance level could signal further bullish momentum, potentially propelling the price toward the $28.80 price region, its next crucial resistance level. If it breaks through this level, SOL could be on a strong rally, riding on a strong bullish momentum.

However, it’s essential to approach these potential gains with caution. A combination of factors, notably recent market sentiment, trading volumes, and broader macroeconomic conditions, could cause a downtrend in SOL’s price.

Should SOL’s price trend downwards, its next critical support would be near the $23.20 level. A drop below this level could trigger a further corrective move.

At the time of writing, SOL trades at $24.08, according to Coingecko data, gaining 6.2% in the last 24 hours and 23% over the past 30 days.

Author: Owen Clark

Owen Clark, a seasoned crypto newsman and broker, deciphers the intricacies of the digital currency realm, empowering investors with his astute analysis and actionable insights.

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