Despite a recent cooling period in the market, the Solana [SOL] blockchain continues to demonstrate strong network activity. In November and earlier this month, the strengthening of bearish forces became the dominant factor in tempering market sentiment.
Examining the significant leap in Solana's recent activity, it is not difficult to see that its operating conditions remain solid. Notably, the total value locked (TVL) on the network has surpassed previous records for 2024, reaching a new milestone of 55.37 million SOL. Given the frequent fluctuations in SOL's price, measuring the changes in TVL in SOL rather than USD is undoubtedly more practical and accurate.
Positive growth in TVL is often closely linked to long-term optimistic expectations and the healthy development of network activity. Despite a recent dip in market sentiment, Solana's on-chain transaction volume remains high. Over the past two days, its average daily transaction volume has climbed to over $3 billion.
Solana's trading data further corroborates the ongoing growth of network activity. The number of transactions has been on the rise for months, peaking at 67.77 million transactions (TXS) in the past 24 hours. This figure marks a new high for Solana's network transaction volume in the past 11 months.
Is SOL ready for a strong comeback?
The recent surge in network activity may indicate an organic increase in demand for Solana's native cryptocurrency. However, the overall market has not performed well, especially in the past week, and Solana's native cryptocurrency has not been spared.
Last week, SOL fell from its peak to its lowest point, with a drop of 23%. However, this also means it retested an important level. The price has been hovering between the 0.5 and 0.618 Fibonacci retracement levels, based on the September low and the November high.
The RSI has nearly fallen into the oversold zone during the recent decline. This may suggest further drops in the coming days. However, at the time of writing, the price has shown signs of bearish fatigue.
If a rebound from the Fibonacci range is expected, traders should look for some signs. So far, bearish momentum has weakened. However, spot fund flows remain negative, although it is worth noting that the intensity of outflows has decreased over the past four days.
The decrease in spot outflows may pave the way for a recovery. However, the derivatives market also indicates that SOL may not yet be ready for a strong comeback.