Solana Network Activity Remains Positive Despite Bearish Conditions

Assessing the chances of SOL entering recovery mode after a bearish week.

The Solana [SOL] blockchain is showing signs of robust network activity despite recent market cooldowns. The bears have subdued the market excitement that was prevalent in November and earlier this month.

It is business as usual for Solana, as evidenced by its latest spike in activity. The network’s Total Value Locked (TVL) just hit a new 2024 high at 55.37 million SOL. This TVL performance is more indicative in terms of SOL rather than dollar value due to SOL price fluctuations.

Positive TVL growth is often associated with long-term optimism and healthy network activity. Solana’s on-chain volume remained high despite bearish sentiments, averaging over $3 billion in daily volume over the last two days.

Transaction data indicates growing network activity, with transactions on an uptrend, peaking at 67.77 million TXS in the last 24 hours. This was the highest transaction count on the Solana network in the past 11 months.

Is SOL Ready for a Bullish Comeback?

The recent surge in network activity may signal a rise in organic demand for the Solana native crypto. However, overall market performance has been bearish over the past week, and SOL was not spared; it dipped by 23% from its highest to lowest level last week.

This dip also indicated a retest of an important level, with the price hovering between the 0.5 and 0.618 Fibonacci retracement levels based on its September lows and November peak.

The Relative Strength Index (RSI) almost dipped into oversold territory with the latest dip, suggesting possible further downside in the coming days. However, the price showed signs of bearish exhaustion at the time of writing.

If a bullish recovery from the Fibonacci range is expected, traders should look for signs. The bearish assault has cooled down, although spot flows remain negative. It’s worth noting that the intensity of outflows has declined over the last four days.

The declining spot outflows may pave the way for some recovery, yet the derivatives market indicates SOL may not be ready for a strong comeback.

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Open interest weighted funding rates were negative over the last two days, marking the first instance of negative SOL funding rates in six weeks. However, it’s important to note that Solana funding rates began to shift back into positive territory within the last 24 hours.