Total Value Locked (TVL) in the Solana ecosystem has reached its lowest level this month, indicating a decline in activity on its layer one network.
Since the beginning of December, over $1 billion has exited the Solana DeFi ecosystem. This sharp drop is due to a decrease in daily active addresses and on-chain activities.
According to DeFiLlama, Solana’s TVL index currently stands at $8.01 billion, showing a 12% decrease compared to the beginning of the month.
Jito protocol, one of the leading protocols in Solana’s DeFi sector, has experienced a 28% decline last month, bringing its TVL to $2.66 billion.
The decrease in Solana’s TVL indicates a broader decline in network usage during this period. User activity on the Solana network has decreased since the beginning of December. In the past 21 days, 5.37 million unique addresses have conducted at least one transaction, indicating a 7% decrease in user activity.
The reduced network usage has led to a drop in its revenue, exacerbating the decline in SOL price. SOL price has decreased by 28% in the last 30 days, while network revenue has also dropped by 24% since the beginning of December.
Meanwhile, Solana’s Chaikin Money Flow (CMF) indicator has turned negative, indicating low demand for this digital asset. The current value of this indicator is -0.04, suggesting more selling pressure than buying.
If this selling trend continues, the SOL price may drop to $168.83. However, if market sentiments shift positively, the price could surpass the $187 resistance level and reach over $200.
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