Solana (SOL) Price Analysis: Can DeFi Activity Boost Bullish Momentum?

Solana (SOL) price has been struggling to break above the $200 level this week despite increased capital inflows from the meme coin craze. With a recent uptick in DeFi activity, can this intensify the bullish momentum for SOL?

Solana DeFi TVL Nears $5 Billion

Currently trading at $190, Solana is on track to end the month with gains exceeding 60%. The recent rally in Solana’s price has been fueled by the surge in interest surrounding native memes like Dogwifhat (WIF), BONK, SLERF, and BOME. Additionally, the focus has shifted towards the DeFi sector, with Solana aiming to surpass BNB Chain in the Total Value Locked (TVL) rankings.

“Despite the recent price pullback, Solana’s DeFi TVL continues to rise, indicating bullish underlying dynamics.”

During a price consolidation phase, an increase in TVL in decentralized finance protocols signifies growing confidence in Solana’s DeFi ecosystem. Investors are turning to DeFi platforms to earn yield on their holdings, signaling a positive outlook for SOL price action.

Speculative Traders Eyeing Solana Price Breakout

Speculative traders are positioning themselves for the next Solana price rally, as indicated by increased fees paid by long position holders in the derivatives market. The funding rate metric reflects a dominant bullish sentiment, with leveraged long positions willing to pay higher fees for continued upside potential in SOL’s spot price market.

SOL Price Forecast

With growing DeFi TVL and a surge in funding rates, Solana’s price is poised for a breakout towards $210 in the coming weeks. However, bears are mounting resistance around the $209 level, with potential liquidation losses of over $143 million if prices breach the $207.5 mark.

“Bulls could drive SOL prices to new yearly peaks above $210 if growing DeFi traction persists.”

On the downside, if sell-offs trigger a market reaction, SOL price could retreat towards $165. It’s crucial for traders to monitor key levels and market dynamics to capitalize on potential price movements.

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