Surging Total Value Locked Paves Path for Solana Price Breakout
Summary:
Solana's total value locked (TVL) hits $1.9 billion, witnessing a 244% rise over the past three months. This increase positively correlates with the SOL price, recording a growth of over 100% during the same period. The low transaction fees and active developer community have spurred trader interest in Solana's DeFi ecosystem. Several upcoming airdrops are expected to generate further engagement. SOL's current trading trend indicates a potential price breakout. Investors are advised to conduct individual research due to the inherent risks associated with trading moves.
Technical and on-chain data indicates a significant price surge for Solana (SOL) in the coming days. Solana's total value locked (TVL) recently hit $1.9 billion on February 19, according to DefiLlama data. The last instance of Solana reaching a TVL of around $2 billion was back in June 2022. Over the past three months, Solana’s TVL has grown 244% from $580 million noted in November 2023.
There's a direct correlation between the increased TVL and the SOL price, which has seen a rise of over 100% in the same timeline. Looking at a shorter timeframe, Solana's TVL has climbed over 40% in the last month, outperforming other top blockchain protocols including Ethereum and BNB Chain that experienced 30% and 19% TVL growth respectively.
The upswing in TVL highlights traders' growing interest in Solana's DeFi sphere and its continued pull to new users due to its low traction fees, mainly for participants seeking new airdrops. As per Solscan, Solana’s transaction fees hover consistently low between $0.0001 and $0.0003, substantially lower than Ethereum's fees.
The active developer community on Solana, with over 2,500 contributors, emphasizes its standing as a thriving blockchain space. A noteworthy part is its over 50% retention rate, indicating continued participation and a nurturing surrounding for innovation.
The developer community's efforts have led to numerous DApps being developed on the layer 1 blockchain, paving the way for a plethora of airdrops in the Solana network. One exemplary airdrop was Jupiter's (JUP), the prominent decentralized exchange (DEX) aggregator, at the end of January. This followed the Solana ecosystem's rejuvenation in the 2023's latter half with key long-term projects such as Jito and Pyth launching their tokens in November and December 2023 respectively.
Notably, BONK, a meme coin based on Solana, launched a substantial airdrop as a token of appreciation to the Solana community on Christmas Day, 2023. Half of the coin’s supply was distributed to Solana-based artists and collectors, a move to foster the creative community.
It remains to be seen if the expected airdrops in the coming months will materialize.
SOL's price pattern indicates a breakout as it's trading above what seems to be an inverse head-and-shoulders (IHS) pattern's neckline. An IHS pattern forms after a long-term downtrend, consisting of a head, a left shoulder, and a right shoulder. A breakout and closure above the neckline indicate a reversal of the downtrend.
SOL surpassed the neckline at $107 on Feb. 12, converting the level into support. If the price remains above the neckline, it denotes the bull's ability to maintain higher rates. This increases the possibility of a break above $126. A definitive daily candlestick closure above $126 could prompt the SOL/USD pair to achieve the pattern's technical target at $135, a 27% increase from the present price.
The upward-facing relative strength index and the price strength of 60 reflect the market's buyer dominance.
Viewers should note that this article doesn't provide investment advice or recommendations. Each investment and trading move involves risk, and readers are recommended to conduct their research before making a decision.
Published At
2/19/2024 11:08:43 PM
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