Solana (SOL) has recently experienced a decline in price, dropping below the key $120 level that had been a significant pivot point in recent trading sessions. This downward movement coincides with the network’s Total Value Locked (TVL) reaching a three-year high of $56 million, highlighting the increasing activity within the decentralized finance (DeFi) sector on the Solana blockchain.
Despite the drop in price, Solana had previously found strong support around the $114.57 level, which had previously acted as a resistance area before flipping to support. Market participants had been closely monitoring the $120 level as a crucial point for potential price reversals, but the recent weakening in price action has raised concerns among traders.
The next major resistance level for Solana is currently at $135, which may come into play if the token manages to recover from its recent decline. However, a continued drop below $97 could expose the token to further downside, especially if buyer support weakens near previous demand zones.
In terms of technical indicators, Solana’s Relative Strength Index (RSI) is currently at 44, indicating slight overselling. While the RSI had been trending upwards earlier, the recent price decline suggests that buying momentum is once again weakening. The Awesome Oscillator remains in negative territory, although there are signs of a possible momentum shift with the histogram starting to turn green.
Solana’s DeFi TVL hitting $56 million signifies a growing interest in DeFi platforms built on the Solana blockchain, with more capital being deployed across protocols. This uptrend in TVL reflects increasing user activity and potentially stronger long-term fundamentals, despite the short-term price weakness observed.
One factor that traders are closely monitoring is the upcoming $200 million token unlock event, which is set to be the largest single-day release of SOL tokens until 2028. Unlock events typically introduce temporary price pressure by increasing the circulating supply, potentially leading to volatility in the market. The timing of the unlock, occurring while Solana trades below $100, has raised concerns about near-term price movements and market reactions.
As traders position themselves cautiously and adjust risk levels in response to the uncertain outlook, liquidity conditions around the unlock date will play a significant role in determining the extent of the market’s reaction. The combination of market sentiment, technical indicators, and upcoming events will likely shape Solana’s price action in the coming days.
In conclusion, Solana’s recent price decline below $100, coupled with the upcoming $200 million token unlock event, has created a mixed market environment for traders. While the network’s DeFi TVL continues to show growth and interest in the platform, short-term price weakness and potential volatility from the unlock event highlight the need for caution and strategic positioning in the market.