Solana price has staged a strong recovery in the past few days as concerns about the coin remains. SOL rose to a high of $12.47, which was the highest level since December 16th. It has risen by more than 51% from the lowest level in 2022.
Solana DeFi TVL plummets
Solana price has been in the spotlight in the past few months after the collapse of FTX and Alameda Research. FTX was one of the biggest investors in its ecosystem. Therefore, when FTX collapsed, most investors exited the so-called Sam Coins. Others include Near Protocol, Serum, Bonfida, and Ren.
Solana has had a difficult time since then. The biggest one was the collapse of Serum, which was the biggest player in the DeFi ecosystem with a total value locked (TVL) of over a billion. Serum collapsed after it emerged that its key was held by FTX.
Since then, Serum developers have been attempting to rebuild through OpenBook, a new clone. However, the new version has had little traction as its total value locked (TVL) has been stuck at $1.5 billion in the past few months. Analysts doubt whether it will gain traction.
In total, Solana’s TVL has dropped to about $350 million from its peak of over $20 billion. Fees in its ecosystem have also dropped. It has generated $697k in fees in the past 30 days. At its peak, it used to make more than that per day.
So, is this fear of Solana warranted? Some analysts believe that Solana will rebuild its trust among developers because its technology works. It can process thousands of transactions per second (tps) and its costs per transactions is significantly lower than that of Ethereum and other chains.
Also, its ecosystem is still expanding. Some of the top players in it are Marinade Finance, Solend, Orca, Raydium, and Quarry among others. As shown below, Solana is still handling more transactions than other chains.
On the other hand, some analysts caution that Solana will struggle to make a comeback. There are rumours that some developers have started moving from Solana to other networks like Ethereum and Aptos.
Solana price prediction
The 4H chart shows that SOL price has been in a strong comeback in the past few days. It has managed to move above the important resistance point at $10.98, which was the lowest point on November 22. SOL has also risen above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) moved to the overbought level.
Therefore, I suspect that the coin will continue soaring as buyers target the next key resistance point at $16. In the long term, I believe that Solana will rebound as concerns about its FTX exposure wanes.
