Despite everything, Solana seems to be holding firms. And, there are reasons for the same…
- At press time, SOL’s price was defending a crucial support level DeFi activity on the Solana network has been rising, with the TVL jumping by nearly $1 billion since 5 August
The wider cryptocurrency market traded in the red on 15 August during Asian trading hours. As expected, the ensuing bearish sentiment weighed down on Solana’s (SOL) price too, with the altcoin dropping by 3.8% to trade at $142 at the time of writing.
That’s not all though as SOL trading volumes also jumped by 28% in the last 24 hours.
Key support level to watch
On the price charts, Solana established a demand zone between $141 and $142. These levels are also acting as crucial support, with SOL bouncing each time these prices have been tested.
SOL broke out above the mean threshold at $141 and out of the demand zone on the hourly chart. However, for the uptrend to be sustained, it needs to maintain its levels above it.
Source: SOL/USDT, TradingView
The support was also acting as a good entry point for buyers. The Relative Strength Index (RSI) line formed a higher low, despite being below the signal line. This pointed towards a bullish divergence, signalling that the downtrend may be weakening.
The RSI at 41 underlined the sellers’ dominance though, with SOL still fairly bearish. Even so, the movement of the RSI line underlined a slight uptick in buying activity.
The Awesome Oscillator (AO) further strengthened the case for weakening bearish momentum after forming a single green candle. And yet, the short-term momentum remained weak at press time.
In fact, the AO also revealed a previous attempt to reverse the downtrend, but it failed. SOL needs an uptick in buying interest to hold key support levels and drive more gains on the charts.
Surge in SOL network activity
A hike in decentralized finance (DeFi) activity on the Solana network could be the next catalyst for growth after memecoin mania.
Data from DeFiLlama, for instance, revealed that Solana’s Total Value Locked (TVL) jumped from $3.8 billion on 5 August to $4.75 billion at press time.
Source: DeFiLlama
The hike can be attributed to a rise in liquid staking activities. Liquid staking platform Jito dominated Solana’s DeFi volumes with $1.7B in TVL. Staking platform Solayer, which launched recently on the Solana mainnet, has hit $153M in TVL too.
This growth in DeFi activity could sustain a long-term uptrend.
Additionally, data from Coinglass highlighted that Solana funding rates have flipped positive. This can be interpreted as a sign of high buying interest and bullish sentiment, with long traders maintaining their positions.
Source: Coinglass
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