Solana (SOL) has experienced positive price movements in recent weeks, yet underlying concerns regarding low organic demand persist. Despite the bullish price action, the Total Value Locked (TVL) on the Solana network remains low compared to its competitors, raising concerns about its long-term stability.
This discrepancy between price and usage indicates that the recent gains might be driven by speculative trading rather than fundamental network growth.
The low TVL on Solana suggests that the network is not attracting the same level of decentralized finance (DeFi) activity as other major blockchain platforms. TVL is a crucial metric for evaluating a blockchain’s health, as it reflects the amount of assets locked in its DeFi protocols.
A low TVL indicates a lack of real-world usage and reliance on speculative trading, which can lead to increased volatility and price instability.
Analysts have identified the $150 price level as a critical threshold for Solana. A breakout above this level, accompanied by high trading volume, would signal strong buying interest and could pave the way for further gains. However, without significant volume and real usage, the price may be vulnerable to pullbacks. The question of whether or not Solana can sustainably hold above $150 remains.
Furthermore, network stability remains a concern for Solana. Historical issues with network outages and congestion have impacted investor confidence and hindered widespread adoption.
While recent improvements have addressed some of these issues, the network’s reliability is still a factor that investors consider. Ensuring robust and stable performance is crucial for attracting long-term users and developers.
The broader market dynamics also play a significant role in Solana’s price action. Interest rate adjustments, macroeconomic trends, and the overall sentiment in the cryptocurrency market can impact SOL’s price. Global uncertainty may be contributing to the lack of investor confidence.
However, Solana’s high transaction speed and low fees offer significant advantages, which could attract future DeFi and Web3 projects. Developers are exploring use cases within the platform, so future utilization may increase. Future improvements to the network reliability are necessary for the TVL to rise.
Shogun Lin
