Solana on-chain analysis underscores how rapid capital influxes and increasing network participation rate could propel SOL price toward $120 in the days ahead. Solana witnessed significant growth in TVL (Total Value Locked) and within its DeFi ecosystem over the past week, even leading to a brief network outage. On-chain data analysis emphasizes how swift capital influxes and rising network participation rate could drive SOL price toward $120 in the coming days.
Solana Price Breaks Above $100 after a Week of Consolidation
SOL has been amidst significant controversy and volatility recently. SOL prices concluded January strongly with a remarkable 35% upswing from $79 to $105 between Jan 23 and Jan 31, thanks to rising DeFi activity. Things took a negative turn on Feb 6, when the Solana network ceased to confirm transactions. The Solana blockchain encountered a 5-hour outage on February 6, 2024, prompting unfavorable market sentiment.
Interestingly, rather than trigger a panic sell-off, bullish SOL holders maintained their positions. And on Feb 8, SOL price experienced another upward surge, hitting the $105 mark at noon Eastern time. On-chain data trends indicate that this 33.6% price rally over the last 16 trading days could be attributed to Solana’s DeFi ecosystem attracting millions of dollars worth of capital inflows.
Solana DeFi TVL Peaks: Investor Interest Drives Growth
Solana Total Value Locked (TVL) Achieves a 20-Month Peak On Feb. 8, 2024, Total Value Locked (TVL) within Solana’s DeFi ecosystem surpassed the $1.8 billion mark for the first time since June 2022. As per DeFillama data, it has increased by a remarkable $500 million in the last 16 days dating back to Jan. 23. This milestone was achieved due to projects developed on the Solana layer-1 network that have made significant strides in attracting investor attention in recent weeks.
While the Jupiter (JUP) decentralized exchange ($120M TVL) airdrop has arguably gained the most media attention, projects like Jito ($771M TVL), Kamino ($371M TVL), and Blazestake ($269M TVL) have actually garnered the highest capital influxes over the past month. When a layer-1 blockchain network experiences a boost in TVL as currently observed on Solana, it serves as a strong indication of growing investor interest in its native projects. As users of those projects commence their desired network transactions ranging from liquidity staking to DEX trading, it generates increased market demand for the native SOL token and ultimately drives up the price.
SOL Price Forecast: Clear Path to $120?
Based on the data trends analyzed above, the organic $500 million increase in Solana TVL has played a crucial role in driving the 33.5% SOL’s price rally between Jan. 23 and Feb. 8, and with the TVL still on an upward trend, SOL could be poised for further price gains, potentially revisiting the coveted $120 territory in the days ahead.
Regarding key resistance points to monitor, the upper Bollinger band technical indicator suggests that bears may establish a sell-wall around the previous local top at $105.9. However, if the bulls can execute a decisive breakout above this level, a bold move toward the $120 territory could be in the offing. Conversely, the bears could invalidate this optimistic Solana price projection if they manage to push the price below $80. However, this currently appears unlikely, with the lower Bollinger band indicator indicating a looming support buy-wall at $83.