Solana (SOL) Total Value Locked (TVL) has seen a recent dip to $9.90 billion, the lowest since November 2024, before rebounding slightly to $10.3 billion. Despite this turnaround, SOL's TVL is still down by almost 30% from January 18, reflecting concerns about its ecosystem.
Similarly, SOL's price has been under pressure, experiencing a decline of over 8% in the past week and more than 31% over the last 30 days. While technical indicators point towards a potential recovery, bearish trends persist, with SOL trading below crucial resistance levels.
Solana TVL has hit its lowest point since November 2024, currently standing at $10.3 billion after a recent drop to $9.90 billion on February 17, marking the lowest level in over three years. Despite a slight uptick, the TVL is significantly lower than its value of $14.2 billion on January 18, signaling a decline in investor trust.
This decrease coincides with ongoing controversies surrounding the Solana ecosystem, including criticisms about being overly extractive and the contentious launch of the meme coin LIBRA, leading to capital outflows.
Monitoring TVL is vital as it reflects the total locked capital in a blockchain's DeFi ecosystem, showcasing liquidity and investor sentiment. Despite a modest recovery in SOL's TVL, the substantial decline in the past month raises persistent concerns.
Failure to address these issues could result in continued capital outflows affecting SOL's price and recovery pace. On the flip side, restoring confidence could drive an increase in TVL, indicating renewed interest and backing for SOL.
Solana's technical indicators are still showing bearish signals but hint at a potential recovery in the making. While the price remains below the red cloud in the Ichimoku Cloud chart, signaling a prevailing bearish trend, trading above the blue Tenkan-sen and orange Kijun-sen suggests weakening bearish momentum.
This shift could point towards a short-term recovery as buyer activity gains traction. Nevertheless, the formidable red cloud overhead acts as a robust resistance that Solana needs to surpass for a confirmed bullish reversal.
Amidst these developments, Solana's Directional Movement Index (DMI) underscores that while a downtrend remains in place, the weakening strength of bearish momentum could lead to a period of consolidation.
With signs of buyer pressure increasing and seller pressure diminishing, a potential trend reversal could be on the horizon if buying momentum is sustained.
Solana's road to reclaiming higher price levels hinges on reversing the current downtrend, with resistance at $183 and further targets at $197 and beyond, including the possibility of reaching $220 if buying pressure continues to mount.
Conversely, persistent downtrend and escalating selling pressure could see SOL retesting support at $159 and potentially dropping to $147, its lowest level in months.