Solana's Total Value Locked (TVL) hits $2 billion milestone as Ethereum funds flow in, hinting at potential price gains. Despite a recent 12% price dip, Solana's long-term fundamentals remain strong.
On February 20th, Solana's Total Value Locked (TVL) surpassed $2 billion for the first time in two years, indicating potential price gains ahead as funds flow in from Ethereum through the Wormhole bridge.
Following a peak of $118.40 on February 15th, SOL's price has experienced a temporary setback but could see a rebound towards $150 with the influx of funds from the Ethereum network this week.
Solana's Price Movement and Market Performance
Throughout the first half of February 2024, Solana witnessed a significant surge in price, contributing to a market rally that added nearly $11 billion to its market capitalization. However, profit-taking by investors once SOL reached its 2024 peak caused a shift in market sentiment on February 15th.
As of February 21st, Solana is trading at $103, reflecting a 12% decline from its peak on February 15th. Interestingly, while Solana's price dipped, the total altcoin market grew by 5% during the same period. This divergence suggests that the decline in Solana's price is primarily driven by profit-taking rather than broader market trends.
Inflows from Ethereum Boost Solana's Network
Despite some traders cashing out, the Solana network has continued to make significant progress, potentially setting the stage for a price rebound. Inflows from Ethereum have been substantial in the past week as investors seek to capitalize on Solana's efficient and cost-effective decentralized finance (DeFi) services.
Between February 14th and February 21st, over $24.6 million worth of funds were transferred from Ethereum to Solana, according to data from the Wormhole bridge Explorer.
This influx of funds underscores Solana's increasing appeal among developers and DeFi users due to its high throughput and low transaction costs. As a result, the growing adoption and utility of Solana-hosted decentralized applications (dApps) serve as a bullish indicator for its long-term prospects.
Solana's DeFi TVL Surpasses $2 Billion
The recent wave of fund inflows has propelled Solana's Total Value Locked (TVL) above the $2 billion milestone for the first time since June 2022. This achievement highlights the robust growth of Solana's fundamental network metrics despite the recent price pullback.
These developments indicate a notable disparity between short-term price movements and long-term investor sentiment. If current trends persist, the increasing demand for Solana's DeFi services could translate into market demand for native SOL tokens, potentially leading to a bullish price reversal towards the $150 mark in the near future.