Solana's Recovery: Staking Surge and Buying Frenzy Signal Bullish Turn

Solana (SOL) Price Shows Signs of Recovery After 30% Decline from January ATH

Solana (SOL) has experienced a significant decline of around 30% from its all-time high (ATH) in January. However, recent market activities suggest that the asset may be on the brink of a bullish turn. At press time, SOL's 24-hour gain was 0.01%, despite on-chain metrics indicating a building bullish momentum.

Staked SOL surges over three months

Nansen reports that the amount of SOL staked has surged from $7.7 million to $62.3 million over the past three months. Staking involves traders depositing assets with validators to help secure the network, earning an APY in return. When significant staking surges occur, especially with yields remaining low, it typically indicates a bullish market sentiment, as traders use staking as a long-term holding strategy that allows them to earn while holding. With staked SOL nearing $100 million, buying activity also rose as traders accumulated more SOL.

Buying and trading activity surges

According to Coinglass, there has been a surge in the amount of SOL purchased in the past three weeks. During this period, a total of $674.75 million worth of SOL was potentially bought from the market and transferred into private wallets for long-term holding. This signals market optimism as traders take advantage of the price dump to purchase SOL at lower prices. Similarly, the number of daily active addresses in the past three days has increased, growing from 4.4 million to 5.8 million, per Artemis data. When a surge in buying action is followed by a gradual increase in gains, it suggests that buyers have outpaced sellers, with the possibility of a further rally.

Liquidity gradually climbing

The Total Value Locked (TVL), which is used to determine the amount of SOL moved into various Solana protocols, has seen a gradual increase in recent days. A surge in TVL positively impacts price, while a decline negatively affects it. DeFiLlama reported a growth from $9.705 billion on the 3rd of February to the press time level of $10.22 billion, meaning SOL may likely follow suit soon. Overall,