- Solana’s TVL was finally growing at the time of writing, but was still miles away from the previous all-time high.
- The TVL could be an indication of SOL’s upcoming bull run.
Solanas [SOL] Total Value Locked has been a major concern lately, especially for investors, given its hard decline from its 2021 peak. However, the latest data showed TVL returning to positive growth as of September 30.
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To put things in perspective, Solana’s TVL peaked at just over $10 billion in November 2021 before going into freefall. In January 2023, the price bottomed out at $210 million. However, it has since recovered and recently peaked above $327 million.
This meant that TVL increased by approximately $116 million on a YTD basis – confirming that positive growth was returning.
???? BREAK: @solana‘S TOTAL VALUE LOCKED (TVL) HAS RISE TO $327.06 MILLION, RECOVERING FROM ITS PRE-FTX POSITION AND REACHING THE HIGHEST LEVEL IN THE PAST 10 MONTHS. pic.twitter.com/WMJOznEhrw
— Sol Bulletin ???? (@SolBulletin) September 30, 2023
While the TVL’s recovery to date is significant, it pales in comparison to how much the TVL has tanked since the 2021 peak. The graph below shows the magnitude of the downward trend.
Source: Solana TVL
Solana’s TVL outflows since November 2021 reflected the bearish state of the market. Does this mean TVL will recover during the next bull market? While that’s not necessarily a guarantee, it likely will be during the bull market.
Interestingly, the TVL recovery was consistent with existing bullish conditions.
SOL bull flex next to TVL growth
SOL just hit its most bullish week since mid-July. It gained 29% in the last seven days and 39.08% from the lowest price level in September. The press time price of $23.12 represented a 65% gain from the 2023 low.
Source: Tradingview
Based on the price trend, we can see that the price recovery of SOL had some correlation with the TVL growth in 2023. The TVL growth in the last week of September could be related to the price increase.
However, continued development activities in pursuit of growth may be responsible for the growing confidence in the Solana community.
Read Solana’s [SOL] Price forecast 2023-24
Solana’s on-chain data further showed that development activity has grown steadily since hitting a monthly low on September 12, and also hit a new low in the past 24 hours.
Furthermore, the Weighted Sentiment measure has remained near its lowest levels over the past four weeks, indicating that SOL is still far from reaching peak investor confidence.
Source: Santiment