Solana's TVL Rebounds, but Price Pressure Persists

Solana (SOL) has shown signs of recovery, with its Total Value Locked (TVL) bouncing back from a low of $9.90 billion on February 17 to $10.3 billion. Despite this rebound, TVL remains down nearly 30% from January 18, reflecting ongoing concerns about the Solana ecosystem.

SOL's price has also been under pressure, falling more than 8% in the last seven days and over 31% in the past 30 days. However, technical indicators suggest a potential recovery, with bearish trends losing some of their strength. SOL is currently trading below key resistance levels, but the bearish trend appears to be weakening.

The decline in Solana's TVL coincides with controversies surrounding its ecosystem, including accusations of being too extractive and criticism over the launch of the meme coin LIBRA. These issues have contributed to capital outflows, putting pressure on SOL's price.

Tracking TVL is crucial as it indicates the total capital locked in a blockchain's DeFi ecosystem, reflecting liquidity and investor confidence. Although Solana's TVL has recovered slightly, the sharp drop over the past month highlights ongoing concerns. If these issues are not addressed, continued capital outflows could pressure SOL's price and slow its recovery. Conversely, if confidence is restored, a rising TVL could signal renewed interest and support for SOL.

Solana's Ichimoku Cloud chart shows that the price is currently below the red cloud, indicating that the bearish trend is still dominant. However, the price is now trading above the blue Tenkan-sen (conversion line) and the orange Kijun-sen (base line), suggesting that bearish momentum is weakening. This could indicate a potential short-term recovery as buyers start to gain some control. Nevertheless, the thick red cloud overhead acts as a strong resistance, which Solana would need to break through to confirm a bullish reversal.

In this case, the fact that Solana remains under the red cloud suggests that the overall downtrend is not yet reversed. However, if the price can break above the cloud, it would be a strong bullish signal. Conversely, failure to break the resistance could lead to renewed selling pressure, continuing the bearish trend.

Solana's Directional Movement Index (DMI) chart shows that its Average Directional Index