The price of Solana (SOL) has struggled to surpass the $200 level this week despite a surge in capital from meme coins. Can the recent increase in DeFi activity strengthen the bullish trend?
A wave of profit-taking among Solana traders has kept the SOL price below $200 in recent days. However, with the rise in DeFi volumes, speculative traders are now placing more bullish bets in hopes of a major breakthrough.
Solana’s DeFi Total Value Locked (TVL) is approaching $5 billion for the first time since February 2022. Currently trading at $190 on March 28, Solana is expected to end the month with gains of over 60%. The recent rally in Solana has been fueled by the growing interest in native memes like Dogwifhat (WIF), BONK, SLERF, and Book of Meme (BOME).
The focus has now shifted towards the DeFi sector, with Solana surpassing Ethereum in Dex trading volumes and aiming to overtake BNB chain in the global TVL rankings.
Despite a recent price pullback, Solana’s DeFi TVL continues to rise. While the SOL price has remained in the $180 – $190 range since March 23, over $600 million has flowed into the SOL DeFi ecosystem during this period.
As of now, SOL TVL has reached $4.6 billion, marking the highest level since February 2022. The increase in TVL during a consolidation phase may indicate positive underlying dynamics, reflecting confidence in Solana’s DeFi protocols and investors turning to DeFi platforms for yield during price consolidation.
Speculative traders are positioning themselves for the next Solana price breakout, with funding rates increasing in the derivatives market. The rise in funding rates suggests a bullish sentiment among long position holders, anticipating further upward momentum in SOL’s spot price market.
Based on the growth in DeFi TVL and funding rates, Solana’s price is poised to break towards $210 in the coming weeks. However, bears have set a resistance level at $209, with potential losses of $140 million if prices breach this level.
If the sell-offs trigger a significant downward market reaction, SOL price could drop towards $165. On the other hand, if the bullish momentum continues, prices could surpass $210 and reach new yearly highs.
Overall, Solana’s DeFi traction and speculative trading activity are shaping the future price movements of SOL, with the potential for both upward and downward pressure in the near term.