Solana’s Total Value Locked (TVL) and Revenue Growth
Solana’s Total Value Locked (TVL) has been experiencing a continuous rise since the beginning of this year. As of January 2023, the metric reached its highest value, indicating a high number of assets being staked on the Solana blockchain. This growth in TVL was accompanied by a positive momentum in the blockchain’s revenue, which contributed to the overall growth of the ecosystem.
Bird’s-eye view of Solana
According to DeFiLlama’s data, Solana’s TVL has consistently remained above $1 billion for multiple weeks, further reinforcing the blockchain’s strength. This sustained TVL also resulted in increased blockchain revenue.
However, there were some areas of concern. SOL’s popularity in the decentralized space declined, evident from the drop in its DEX volume and daily transactions over the past few weeks. The NFT ecosystem on the blockchain also witnessed a declining trend, with daily NFT transactions and total NFT trade volume experiencing sharp declines.
Solana’s Price Response
Solana’s achievements in the DeFi space positively impacted its price, leading to a rally last month. The token’s value nearly reached the $30 mark in mid-July, which was a bullish sign. This price surge also allowed Solana to flip several other cryptocurrencies, making it the 9th largest by market capitalization.
During the bull rally, SOL’s trading volume experienced a significant uptick, reflecting high investor confidence. Additionally, the token remained in demand in the derivatives market, as indicated by its green Binance funding rate.
Considerations for SOL Investors
While last month’s gains were encouraging, the bears have become more active. According to CoinMarketCap, SOL’s price declined by nearly 2% in the last 24 hours alone, currently trading at $24.55 with a market cap of over $9.9 billion. The increase in trading volume during the price decline is typically a bearish signal. SOL’s MACD also displayed a bearish edge in the market, further adding to the cautious sentiment.
Furthermore, the Bollinger Bands indicated that the token’s price entered a less volatile zone, reducing the likelihood of a sudden significant price movement.
Solana’s Total Value Locked and revenue growth have been promising indicators of the blockchain’s strength. However, the recent decline in SOL’s price and other bearish market indicators call for caution among investors. Monitoring the market closely and staying updated with relevant data will be essential for making well-informed investment decisions in Solana.