Solana Price Prediction as Total Value Locked Declines by 20% – Is Demand for SOL Weakening?

Following an earlier retest of last week’s lows in the $85s, Solana price (SOL) is attempting to rebound, though declining total value locked (TVL) remains a concern for the bulls.

SOL/USD was last changing hands around $94, with the SOL price up around 5%.

Solana has been moving higher on Monday in tandem with a push higher in leading cryptocurrencies Bitcoin and Ethereum amid optimism that spot Bitcoin ETFs will gain approval in the US this week.

However, at $4.125 billion as per DeFi Llama data, Solana’s declining TVL is a warning sign.

Trade Value Locked (TVL) refers to the dollar-denominated value of cryptocurrency locked within the smart contracts deployed on any given blockchain.

Solana’s TVL peaked on the 25th of December at $5.15 billion and has since declined 20%.

Part of that can be explained by a pullback in the price of Solana and Solana blockchain-issued assets.

SOL is down around 25% from its December peaks, while leading Solana meme coin Bonk (BONK) is down over 70%.

But it may also suggest that DeFi investors and crypto traders have been shifting capital away from Solana.