Despite recent market fluctuations, the Solana [SOL] blockchain continues to display strong network activity. The recent decline in market enthusiasm caused by bearish trends has not dampened the network’s performance.
Solana remains steady as evidenced by its latest surge in activity, with the network’s Total Value Locked (TVL) reaching a new high for 2024 at 55.37 million SOL. It is important to note that the TVL performance is more accurately reflected in terms of SOL due to the fluctuations in its price.
Positive growth in TVL is often associated with long-term optimism and robust network participation. Despite prevailing bearish sentiments in the market, the on-chain volume for Solana has remained high, averaging over $3 billion in daily volume over the past two days.
The transaction data on the Solana network also indicates a significant increase in network activity. Transaction volume has been steadily rising for months and recently peaked at 67.77 million transactions in the last 24 hours, marking the highest transaction count recorded on the Solana network in almost a year.
Could SOL be Poised for a Bullish Rebound?
The recent uptick in network activity suggests a growing organic demand for Solana’s native cryptocurrency. However, the overall market performance has been subdued, particularly in the past week, impacting Solana’s native token as well.
SOL experienced a 23% decline from its recent peak to its lowest point last week, but this retracement also served as a crucial retest of a significant level. The price has been fluctuating within the 0.5 and 0.618 Fibonacci retracement levels, based on its September lows and November highs.
The Relative Strength Index (RSI) nearly entered oversold territory during the recent dip, hinting at the possibility of further downside in the short term. Nevertheless, there were indications of bearish momentum waning at the time of this analysis.
If a bullish recovery within the Fibonacci range materializes, traders should watch for key indicators. While the bearish pressure seems to have eased off, spot flows are still negative; however, the magnitude of outflows has diminished over the past four days.
The decrease in spot outflows could potentially pave the way for a recovery. On the other hand, insights from the derivatives market suggest that SOL may not be fully primed for a robust comeback just yet.
Open interest-weighted funding rates for SOL turned negative over the last 48 hours, marking the first time in six weeks that funding rates have dipped into the negative territory.
It is noteworthy that although Solana’s funding rates started showing a shift back to positive figures in the last 24 hours.