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Solana’s total value locked (TVL) has plummeted to its lowest point this month, reflecting a decline in activity on the Layer-1 network. Since the beginning of the month, over $1 billion has been withdrawn from Solana’s DeFi ecosystem. 

The sharp fall in TVL can be attributed to a drop in daily active addresses on the network. This indicates a dwindling user base and reduced on-chain activity.

Solana’s TVL Plummets Amid Low Activity

According to DeFiLlama, Solana’s Total Value Locked (TVL) currently sits at $8.01 billion, representing a 12% decline since December 1, equating to $1.1 billion exiting the ecosystem. The network’s leading DeFi protocol, Jito, has been hit particularly hard, recording a 28% drop in TVL over the past month. At the time of writing, Jito’s TVL is $2.66 billion.

Solana TVL. Source: DefiLlama

Solana’s TVL decline mirrors the broader drop in usage during the period under review. According to Artemis, user activity on Solana has been on a downward trend since the start of the month. Over the past 21 days, 5.37 million unique addresses have completed at least one transaction on the L1, marking a 7% decline in activity on the chain.

Moreover, due to Solana’s low usage, its network revenue has also decreased. This decline has been further worsened by SOL’s performance, with its value dropping by 28% over the past 30 days. According to Artemis’ data, the network’s revenue has plunged by 24% since December began.

SOL Daily Active Addresses. Source: Artemis SOL Price Prediction: A Shift In Market Sentiment Could Reverse Bearish Trend

An assessment of the SOL/USD one-day chart has revealed the coin’s negative Chaikin Money Flow (CMF), which confirms its low demand. As of this writing, this indicator is at -0.04. 

An asset’s CMF measures its accumulation or distribution over a specified period, combining price and volume data. When the CMF value is negative, it indicates more market distribution (selling pressure) than accumulation (buying pressure), hinting at a sustained price decline. If SOL selloffs persist, its price may fall to $168.83. 

SOL Price Analysis. Source: TradingView

However, this bearish projection will be invalidated if market sentiment shifts from negative to positive and buying activity recommences. In that scenario, SOL’s price will break above resistance at $187 and attempt to surge past $200.