Solana price is facing the pinch of high volatility and increased selling pressure this week just like Bitcoin and other altcoin majors. From its new 2024 peak of $210, the competitive smart contracts tokens have trimmed its value by 10% to hover at $188 during US trading hours on Wednesday.

An attempt to recover over the weekend made it above $200 but resistance at $205 overwhelmed the bulls which led to more bleeding with Solana falling to as far as $175.

In the last 24 hours, Solana price has sustained a 4.5% increase in value, underscoring another 8% rise in the trading volume to $4.5 billion. SOL holds the fourth-largest cryptocurrency with a market cap of $84 billion.

1. Solana Price On The Move As DeFI TVL Paces Up

From the time Solana started to rally in Q4 last year, its decentralized finance (DeFi) ecosystem has grown exponentially to be worth $4.78 billion in terms of the total value locked (TVL).

In 2024 alone, the TVL has increased by a staggering 70% from $1.42 billion. TVL refers to the amount of value locked in smart contracts within the Solana ecosystem.

A consistent increase in the DeFi TVL as graphically represented by Defi Llama using blockchain data reflects a significant reduction in the circulating supply.

Investors who are committed to the project for the long term tend to secure their tokens in smart contracts to grow the assets rather than sell Solana at the first opportunity for profit.

This approach also supports positive market sentiment, facilitating and simplifying trend reversals, leading to advocates of SOL predicting a surge to a new record high, surpassing $260.

2. Solana Ecosystem Is Growing

Solana’s rapid growth is attributed to its high transaction speeds, low fees, and scalable infrastructure, positioning it as a strong competitor to Ethereum’s established but congested network.

Over the last year, Solana network has become the go-to protocol for launching new projects, especially meme tokens like dogwifhat (WIF) and BONK.

Solana boasts over 2.5 million followers on X — a vibrant community supporting other upcoming projects and programs and building value.

According to CoinShares, Solana investment products have so far attracted $1.5 billion in assets under management (AUM), increasing by $8 million year-to-date, $24.9 million over the last month, and by $6.1 million in weekly inflow volume.

Solana is the fourth-most popular asset under management behind Bitcoin, Ethereum and, and the multi-asset class.

3. Solana Price Flaunts Bullish Pennant Pattern

The four-hour chart highlights a bullish pennant pattern likely to lead to a major breakout gaming for the previous high at $210 in the short term. This pattern allows for consolidation following a substantial price increase.

After taking profits, investors use this period to enter new positions ahead of another bigger breakout. Therefore, as long as SOL repeats the pattern’s lower boundary, a breakout above the upper trendline would be in the offing.

Although currently stuck below the resistance level at $190, strengthened by the presence of the 20-day Exponential Moving Average (EMA) and the 50-day EMA (the blue and red lines on the chart), Solana seems ready to tip the scales to the bullish side.

The Moving Average Convergence Divergence (MACD) indicator would soon back the uptrend, with a signal for traders to buy SOL. A daily close above $190 would mean a solid uptrend is brewing and Solana may gain momentum above $210 to bring levels at $260 and $300 within reach.

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