Solana (SOL) price is poised for a significant upward movement in the coming days, as indicated by various technical and on-chain indicators.
According to data from DefiLlama, Solana’s total value locked (TVL) reached $1.9 billion on February 19, marking a 20-month high. The last time Solana’s TVL hit $2 billion was in June 2022. Over the past three months, Solana’s TVL has surged by 244%, rising from $580 million in November 2023. This increase in TVL has been accompanied by a more than 100% surge in SOL’s price during the same period.
On a shorter timeframe, Solana’s TVL has risen by over 40% in the past 30 days, outperforming other top layer 1 protocols like Ethereum and BNB Chain, which saw increases of 30% and 19% respectively.
The increasing TVL reflects traders’ interest in Solana’s DeFi ecosystem and indicates a growing number of new users attracted to the platform due to its lower transaction costs, especially those seeking new airdrops. Solana’s fees, as shown by data from Solscan, remain consistently low between $0.0001 and $0.0003, significantly lower than transaction fees on Ethereum.
Solana’s strong developer community, boasting over 2,500 active developers, contributes to its appeal as a blockchain ecosystem. The community’s retention rate of over 50% demonstrates sustained engagement and fosters an environment conducive to innovation. This developer community has led to the creation of several DApps on the layer 1 blockchain, resulting in a series of airdrops within the Solana ecosystem.
Notably, one of the largest Solana airdrops was Jupiter (JUP) from the leading decentralized exchange aggregator, which took place in January. This airdrop was part of the revitalization of the Solana ecosystem in the second half of 2023, with major long-term projects such as Jito and Pyth launching their tokens in November and December respectively. Another significant airdrop was BONK, a Solana-based memecoin, which distributed 50% of its coin supply to Solana artists and collectors as a way to support the creative community.
There are still anticipated airdrops in the coming months, but it remains to be seen if they will materialize.
Looking at SOL’s price, it is currently trading above the neckline of an inverse head-and-shoulders (IHS) pattern, indicating a potential reversal after an extended downtrend. A breakout and close above the neckline would confirm the reversal. The SOL/USD chart shows a similar bullish setup, with SOL surpassing the neckline at $107 and turning it into support. If the price remains above the neckline, it suggests that the bulls can sustain higher levels. A decisive daily close above $126 could lead to a 27% increase in price, reaching the pattern’s technical target of $135.
The relative strength index is indicating upward momentum, with a strength of 60, validating the dominance of buyers in the market.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.