TVL Hits New Highs Again! SOL Soars Imminently! Who Says I Was Born to be Poor?

Solana [SOL] has been one of the most oversold top altcoins, but some experts believe that its over 30% pullback could be a good buying opportunity.

Despite the recent market cooling, the Solana [SOL] blockchain still shows strong signs of network activity. The bears are the reason for suppressing the market excitement that emerged in November and early this month.

SOL's daily RSI (Relative Strength Index) has dropped to levels not seen since mid-2023. This is currently an ideal time to accumulate many altcoins in batches.

From Solana's recent activity surge, everything seems normal. As a backdrop, the network's TVL just hit a new high for 2024, reaching 55.37 million SOL. Due to SOL's price volatility, it is more accurate to measure TVL performance in SOL rather than in dollar value.

Positive growth in TVL is usually associated with long-term optimism and healthy network activity. Despite the recent market sentiment being low, Solana's on-chain trading volume remains high. Over the past two days, its daily average trading volume exceeded $3 billion.

Solana's trading data also shows that network activity is continuously increasing. Trading has been on an upward trend for months, peaking at 67.77 million TXS in the past 24 hours. This is the highest number of transactions recorded on the Solana network in the past 11 months.

Can $180 hold?

Since peaking in November, SOL has dropped from $264 to a low of $175. However, the pullback has reached a key confluence area, which should hold if maintained.

Throughout 2024, SOL's sell-off reversed at the 100-day EMA (Exponential Moving Average, blue). This pattern has repeated in June, July, and October.

As of the time of writing, the recent pullback has stabilized at the moving average ($175). Interestingly, this level also coincides with the golden level (61.8%) of the Fibonacci retracement tool, based on the low in September.

In most cases, price trend reversals occur at golden ratio levels. Therefore, if this pattern repeats, SOL could drop to the low of $175, with a potential deviation to $160.

Nevertheless, the overall market sentiment towards SOL remains negative, which could be an ideal choice for long-term investors looking for discounted SOL.

But it is also worth noting that this is the first time SOL sentiment has turned negative since November.

So, how is the market positioned at this key confluence level and under weak sentiment?

According to Coinglass, over 82% of top traders on Binance hold long positions in SOL.

Although this is a slight decrease from the 84% level on December 19, it indicates that most players are still optimistic about SOL's recovery prospects.

Is SOL ready for a strong comeback?

The recent surge in network activity may signal an organic demand spike for Solana's native cryptocurrency. However, the overall market performance has been poor, especially in the past week, and Solana's native cryptocurrency has not been spared.

Last week, SOL fell from its peak to a low, with a drop of 23%. However, this also means it re-tested an important level. The price has been hovering between the 0.5 and 0.618 Fibonacci retracement levels, based on the low in September and the high in November.

The RSI nearly fell into the oversold territory during the recent decline. This may indicate further declines in the coming days. However, at the time of writing, the price has already shown signs of bearish weakness.

If a rebound from the Fibonacci range is expected, traders should look for some signs. So far, bearish momentum has weakened. However, spot fund flows remain negative, although it is worth noting that the outflow intensity has decreased over the past four days.

The decrease in spot outflows may pave the way for recovery. However, the derivatives market also indicates that SOL may not yet be ready for a strong comeback.

In the past two days, the weighted financing rate of open contracts has been negative. This is the first time SOL's financing rate has been negative in the past six weeks.

But note that Solana's financing rates have begun to show signs of recovery in the past 24 hours.