Solana has faced some tough times recently. Its Total Value Locked (TVL) dropped below $10 billion for the first time since November 2024, mainly due to the LIBRA rug pull and a loss of liquidity. This situation has raised concerns about Solana’s DeFi stability.
Although the TVL has bounced back to around $10.3 billion, this still signifies a significant decline of nearly 30% since mid-January. Many are left wondering about the future health of the network as it deals with these challenges.
The recent fall in TVL has been a part of a broader trend within Solana’s DeFi ecosystem. Historically, when the TVL drops, SOL’s price tends to follow suit. This has been seen before during downturns marked by market instability and protocol issues. With the current decline, investor confidence is noticeably shaky.
The LIBRA incident has hit various protocols hard, resulting in liquidity draining away and forced sell-offs. Even though there was a slight recovery in early February, maintaining momentum has proven difficult. This could point to ongoing unease among investors in the Solana ecosystem.
As the price of SOL has also dipped, it was trading at around $173.66 recently, following a small rally. However, the overall downward trend remains. SOL has fallen from over $260 earlier this year, reflecting the ongoing liquidity issues plaguing the DeFi space.
Currently, market indicators show a predominance of selling pressure. The Relative Strength Index (RSI) is at 37.02, suggesting that many investors are cautious. In general, the selling pressure continues to dominate, which could lead to further declines in SOL’s price if Shana can’t restore confidence in its platform.
If the current issues with TVL do not improve, Solana may find it hard to break past the $200 mark in the near future. Investors are closely watching to see if the network can rebuild trust and stability within its DeFi ecosystem.
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