Following an earlier retest of last week’s lows in the $85s, Solana price (SOL) is attempting to rebound, though declining total value locked (TVL) remains a concern for the bulls.
SOL/USD was last changing hands around $94, with the SOL price up around 5%.
Solana has been moving higher on Monday in tandem with a push higher in leading cryptocurrencies Bitcoin and Ethereum amid optimism that spot Bitcoin ETFs will gain approval in the US this week.
However, at $4.125 billion as per DeFi Llama data, Solana’s declining TVL is a warning sign.
Trade Value Locked (TVL) refers to the dollar-denominated value of cryptocurrency locked within the smart contracts deployed on any given blockchain.
Solana’s TVL peaked on the 25th of December at $5.15 billion and has since declined 20%.
Part of that can be explained by a pullback in the price of Solana and Solana blockchain-issued assets.
SOL is down around 25% from its December peaks, while leading Solana meme coin Bonk (BONK) is down over 70%.
But it may also suggest that DeFi investors and crypto traders have been shifting capital away from Solana.
Price declines in major Solana ecosystem assets comes at a time when other on-chain indicators are also flashing weakness.
As per The Block, the 7-day moving average number of active and new addresses engaging with the Solana network appears to have peaked and be in decline.
The 7-day moving average of value moved on chain appears to have also peaked, though remains elevated.
Meanwhile, as per DeFi Llama, total trading volumes across major Solana-based Decentralized Exchanges (DEXs) hit their lowest in over a month over the weekend.
DEX volumes fell under $460 million on Saturday after surpassing $2.6 billion on the 21st of December.
Weaker on-chain
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