In Summary
Solana’s TVL dropped to $9.90 billion before a slight recovery, reflecting ongoing concerns within the ecosystem.
Bearish momentum is weakening, but SOL remains below key resistance levels, limiting the potential for recovery.
A trend reversal could push SOL to $220, but failure to break resistance could see the downtrend continue.
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Solana’s (SOL) Total Value Locked (TVL) recently hit $9.90 billion, its lowest level since November 2024, before a slight rebound to $10.3 billion. Despite this recovery, SOL’s TVL is still down nearly 30% from January 18th, reflecting ongoing concerns about its ecosystem.
SOL’s price is also under pressure, falling over 8% in the past seven days and over 31% in the past 30 days. Technical indicators are showing signs of recovery, but the downtrend remains dominant, with SOL trading below key resistance levels.
Solana TVL Hits Lowest Level Since November 2024
Solana’s current Total Value Locked (TVL) is $10.3 billion, recovering from a low of $9.90 billion on February 17th, the lowest since November 14, 2024. Despite this rebound, TVL is still down nearly 30% from $14.2 billion on January 18th, reflecting a decline in investor confidence.
This decline coincides with controversies surrounding the Solana ecosystem, including allegations of excessive mining and criticism of the launch of the meme coin LIBRA, which have contributed to outflows.
Tracking TVL is crucial as it indicates the total capital locked within a blockchain’s DeFi ecosystem, signaling liquidity and investor confidence. Although Solana’s TVL has recovered slightly, the sharp decline over the past month underscores ongoing concerns.
If these issues are not addressed, continued outflows could put pressure on SOL’s price and slow down its recovery. Conversely, if confidence is restored, a rising TVL could signal renewed interest and support for SOL.
Solana Indicators Remain Bearish But Are Recovering
Solana’s Ichimoku Cloud chart shows the price currently below the red cloud, indicating that the downtrend remains dominant. However, the price is now trading above the blue Tenkan-sen (conversion line) and the orange Kijun-sen (base line), suggesting that bearish momentum is weakening.
This could indicate a potential short-term recovery as buyers begin to gain some control. However, the thick red cloud above acts as a strong resistance, which Solana needs to overcome to confirm a bullish reversal.
In this case, Solana’s position below the red cloud indicates that the overall downtrend has not yet been reversed.
However, if the price can break above the cloud, it would be a strong bullish signal. Conversely, a failure to break through the resistance could lead to renewed selling pressure, continuing the downtrend.
Solana’s Directional Movement Index (DMI) chart shows the Average Directional Index (ADX) is currently at 25.4, down from 43 just two days ago when SOL’s price dropped to around $165.
This decrease in ADX indicates that the strength of the downtrend is weakening, although the trend itself remains in place. An ADX above 25 typically signals a strong trend, but a declining value suggests that the bearish momentum is losing strength. This could lead to a period of consolidation.
Meanwhile, the +DI is at 18.4, up from 5.4 three days ago, while the -DI is at 14.8, down from 39.2 over the same period. This shift suggests that buying pressure is gradually increasing as selling pressure decreases. If +DI continues to rise above -DI, it could indicate a potential trend reversal.
However, as SOL remains in a downtrend, it needs sustained buying momentum to break the bearish pattern. If +DI fails to maintain its upward momentum, the downtrend could continue.
Solana Could Reclaim $200 if Downtrend Reverses
Solana’s Exponential Moving Averages (EMAs) still indicate a downtrend, as the short-term EMAs are below the long-term EMAs. However, the direction of these lines has started to shift slightly since yesterday, with Solana’s price increasing by 4%.
This suggests that selling pressure is weakening and buying interest is gradually returning. If this momentum continues, it could lead to a trend reversal. However, that requires the short-term EMAs to cross above the long-term EMAs.
If SOL can fully reverse the current downtrend, it could test the first resistance level at $183. A successful breakout above this level would signal stronger bullish momentum, potentially pushing the price towards the next resistance level at $197.
If buying pressure continues to increase, SOL’s price could even target $220, representing a significant recovery.
Conversely, if the downtrend resumes and selling pressure intensifies, SOL could retest the support level at $159.
A break below this level would indicate a continuation of the downtrend. That could lead to a decline to $147, the lowest level since October 2024.
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