- Solana price is marching against the odds to recoup gains above $30.00 from the $26.85 support.
- SOL’s DeFi TVL collapses to 919.14 million despite this week’s recovery rally in the crypto market
- Solana price needs to flip the 200-day SMA into support to avoid a possible trend correction.
Solana price is exchanging hands at $31.86 after being piggybacked by a mid-week recovery rally in the crypto market. As reported in this article, Binance Coin price was trading at $290 on Wednesday, while Ethereum price was trading at $1,553 on Thursday. As the market is generally bullish, competitive smart contracts token SOL has the potential to erase resistance at $32.30 as the bulls push for $39.00.
Solana TVL slips below $1 billion
Solana has recently become a force to be reckoned with in the DeFi (decentralized finance) space thanks to its fast blockchain and low transaction fees. The platform’s TVL (Total Value Locked) is a sum of all tokens escrowed across various functions of a DeFi protocol like Solana – including staking, lending, and liquidity pools.
The 2022 bear market was tough for the DeFi sector, with TVL falling across all platforms. Solana’s TLV has suffered a downtrend from its all-time high of $10.08 billion in early November 2021. According to DefiLlama, the platform’s TLV now sits at $919 million after slipping past the $1 billion mark.
Platforms with negative TLV growth need to catch up in liquidity, usability, and popularity. To a large extent, these are the building blocks of a successful crypto project. Therefore, as Solana’s TVL continues to decline, liquidity is bound to shrink along with lower yields.
Solana TVL – DefiLlama
The Solana price is $39.00
Solana is taking a breather between two critical levels – its immediate support at 38.2% Fibonacci level ($30.96) and a confluence resistance at $32.20. This key confluence level was reinforced by the 200-day SMA (simple moving average) (purple) and the 50% Fibonacci retracement level.
With OBV (On Balance Volume) indicator and MACD (Moving Average Convergence Divergence) showing a positive outlook, Solana price might eventually clear the seller pent-up highlighted at $32.30.
SOL/USD eight hour chart
Traders who missed the move from the $26.85 support can look for fresh entries above the 200-day SMA for a conservative take profit target at 61.8% Fibonacci ($33.80). reach. Stubborn bullish traders can wait for Solana price to complete a 100% bullish trend correction to $39.00.
On the other hand, a retracement below SOL’s immediate support at $30.96 should not be ruled out, especially if the bulls fail to clear the 200 SMA resistance. Short positions can be initiated just below the above mentioned support for a profit target at 50 SMA (in red), slightly above a descending trendline from 13th September.
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