On February 20, Solana TVL surpassed $2 billion for the first time in 2 years, and funds flowing from ethereum through the Wormhole bridge suggest more SOL price gains ahead.
SOL price has lost steam after shooting to a new 2024 high of $118.40 on February 15. However, an on-chain data trail of funding inflows coming into Solana from the ethereum (eth) network this week could lead to a SOL price rebound towards $150.
The price of Solana falls 12%, below the market average
In the first half of February 2024, Solana was at the forefront of the cryptocurrency market rally, with the price of SOL rising 26.8% and adding almost $11 billion to its market capitalization. But that market trend changed on February 15 when investors began to take profits once the SOL price reached the 2024 high of $118.
<img decoding="async" width="1600" height="682" src="https://crypto.news/app/uploads/2024/02/image-60.png” alt=”Is ethereum Rally Driving Solana Price To $150? – 1″/>
At press time on February 21, Solana is trading at $103, down 12% from its February 15 highs.
Meanwhile, by contrast, the total altcoin market has grown by 5% during that period. Solana's negative price performance appears driven by insider and existing holders' booking profits rather than macro factors.
Solana receives $25 million in ethereum inflows
However, while some SOL traders are taking tokens off the table, the Solana network has continued to make strides this week, which could trigger an early price rally.
Last week, Solana received significant ethereum inflows as investors increasingly look to take advantage of Solana's more efficient and profitable defi services.
Between February 14 and February 21, investors transferred funds worth more than $24.6 million from ethereum to Solana, according to on-chain data from Wormhole Bridge Explorer.
<img loading="lazy" decoding="async" width="1600" height="740" src="https://crypto.news/app/uploads/2024/02/image-62.png” alt=”Fund outflows from ethereum (eth) to Solana (SOL), February 13-21″/>
This indicates that Solana continues to gain traction among Defi developers and users due to its high performance and low transaction costs. Therefore, this growing flow of funds bridged into decentralized applications (dApps) hosted on Solana is a bullish indicator of its growing adoption and utility.
Solana defi TVL reaches $2 billion milestone
Investors transferring funds worth more than $24.6 million from ethereum to the Solana ecosystem, despite the 12% drop in Solana price in the last seven days, show an evident divergence between the movements of short-term prices and long-term investor sentiment.
<img loading="lazy" decoding="async" width="1600" height="575" src="https://crypto.news/app/uploads/2024/02/image-61.png” alt=”Solana (SOL) Total Value Locked (TVL) Reaches $2 Billion, February 21, 2024″/>
The latest wave of funding inflows has pushed the total value locked (TVL) on the Solana network above the $2 billion milestone for the first time since June 2022.
This further underlines that SOL's current price pullback is not driven by any perceptible deterioration in Solana's fundamental network growth metrics.
If trends persist, rising demand for the Solana defi service could eventually turn into market demand for native SOL tokens and ultimately trigger a bullish price reversal towards the $150 territory in the coming weeks.
