What Next For SOL Price As $1.1 Billion Leaves Solana?
Solana’s total value locked (TVL) has fallen to its lowest point this month, reflecting a decline in Layer-1 network activity. More than $1 billion has been withdrawn from Solana since the beginning of the month Decentralized Finance ecosystem.
The sharp decline in TVL can be attributed to a decline in daily active addresses on the network. This indicates a shrinking user base and reduced on-chain activity.
Solana’s TVL plummets during low activity
According to DeFiLlama, The total value of Solana is locked TVL (TVL) currently stands at $8.01 billion, down 12% since December 1, equivalent to $1.1 billion exiting the ecosystem. The network’s leading DeFi protocol, Jito, has been particularly hard hit, with TVL falling by 28% over the past month. As of this writing, Jito’s TVL is $2.66 billion.
Solana’s TVL is declining Reflecting a broader decline in usage during the review period. According to Artemis, user activity on Solana has been trending downward since the beginning of this month. Over the past 21 days, 5.37 million unique addresses completed at least one transaction on L1, marking a 7% decline in on-chain activity.
Additionally, Solana’s network revenue declined due to lower usage. This decline has been further exacerbated by the performance of SOL, which has lost 28% in value over the past 30 days. The network’s revenue has plummeted 24% since December, according to Artemis data.
SOL price Forecast: Shift in market sentiment could reverse bearish trend
An assessment of the SOL/USD one-day chart shows that the coin has a negative Chaikin Fund Flow (CMF), confirming its low demand. As of this writing, the indicator stands at -0.04.
An asset’s CMF combines price and volume data to measure its accumulation or distribution over a specified period. When the CMF value is negative, it indicates that the market is distributing (selling pressure) more than accumulating (buying pressure), implying that prices continue to fall. If the sell-off in SOL continues, its price could drop to $168.83.
However, this bearish forecast will become invalid if market sentiment turns from negative to positive and buying activity resumes. In that scenario, The price of SOL will break above Resistance is at $187 and there is an attempt to break above $200.
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