Just like Bitcoin and other cryptocurrencies, Solana’s price has experienced high volatility and increased selling pressure this week. Since reaching a new high of $210 in 2024, the competing smart contract token fell 10% during Wednesday’s U.S. trading session, with prices trading around $188.
Despite some attempts to recover over the weekend to break through the $200 mark, the bulls were not strong enough to hold the line after encountering resistance at $205, causing Solana prices to fall back to $175, further exacerbating losses.
In the past 24 hours, Solana’s price has recovered somewhat, rising 4.5%, and trading volume has also increased by 8% to $4.5 billion. SOL is currently the fourth largest cryptocurrency by market capitalization, with a total market capitalization of $84 billion.
As Solana’s decentralized finance (DeFi) ecosystem has grown rapidly since the fourth quarter of last year, it has reached significant growth of $4.78 billion in total value locked (TVL), showing exponential improvement.
Solana’s TVL grew an astonishing 70% from $1.42 billion in 2024. TVL represents the total value locked in smart contracts in the Solana ecosystem.
According to blockchain data provided by Defi Llama, the continued growth of DeFi TVL has significantly reduced the supply in circulation.
Long-term investors would prefer to keep their tokens in smart contracts as a way to increase the value of their assets rather than immediately sell Solana for short-term gains.
Not only does this holding strategy promote positive market sentiment, it also helps accelerate a trend reversal, leading Solana supporters to predict that SOL value will climb to new all-time highs above $260.
The rapid growth of the Solana ecosystem is due to the high-speed transactions, low cost, and scalable platform features it provides, making Solana a powerful challenger to the mature but crowded Ethereum network.
Over the past year, many new projects have chosen Solana as a launch platform, especially meme coins like Dogwifhat (WIF) and BONK.
On the X platform, Solana has gathered more than 2.5 million fans, forming a vibrant community that not only supports upcoming projects and initiatives, but also actively creates value.
According to data provided by CoinShares, Solana’s investment products currently have $1.5 billion in assets under management (AUM), an increase of $8 million so far this year alone, an increase of $24.9 million from last month, and an increase of $6.1 million in weekly inflows.
Solana is currently the fourth most popular asset under management, behind Bitcoin, Ethereum, and multiple asset classes.
On the four-hour chart, Solana is exhibiting a bullish pennant pattern, a pattern that suggests a period of consolidation following a significant rally that could lead to a move above the previous high of $210 in the near term.
This pattern provides investors with an opportunity to take profits and then reposition in order to establish new positions before larger gains follow. Therefore, as long as SOL continues to operate near the lower boundary of this pattern, a breakout of the trendline becomes a near-term possibility.
Although Solana’s price has yet to break above the $190 resistance level, reinforced by the 20-day and 50-day exponential moving averages (EMA) (represented by the blue and red lines on the chart, respectively), it appears to be well positioned Be prepared to tilt in the bullish direction.
The Moving Average Convergence Divergence (MACD) indicator will soon support this uptrend, signaling traders to buy SOL. A daily chart close above $190 would signal that a strong upward momentum is building, potentially pushing Solana above $210 and towards the $260 and $300 target levels.
