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Solana (SOL) has been a standout in the cryptocurrency space, consistently showing strong fundamentals despite experiencing volatility in its price. As of mid-May 2025, Solana’s Total Value Locked (TVL) has remained steady, even with recent price fluctuations. This stability in TVL suggests that the project is undervalued, with a disconnect between its on-chain fundamentals and its current market price. Such a setup is typically a breeding ground for bullish price movements, especially when market sentiment aligns with underlying growth.
On May 11, 2025, Solana traders were jolted by a sudden price dip of 2.64% from the $180 level. However, this drop wasn’t just a typical price retracement. It came with a massive spike in realized profits—up by an astonishing 347.55%. This indicated that seasoned holders were strategically offloading their positions during a moment of price strength, likely locking in profits. Such exits often signal the market’s intent to pull back, but what followed was a textbook short squeeze, as overexposed long positions were liquidated, with $7.86 million worth of long positions being wiped out.
Despite this sharp dip, there is a silver lining for Solana bulls. The liquidation event created an influx of fresh supply, giving short traders an ideal entry point. But more importantly, it set the stage for a potential supply shock. If the bulls manage to capitalize on this setup, they could trap these shorts, leading to a breakout past the $180 resistance level. Such a breakout could provide the necessary momentum for Solana to surge toward higher price levels.
The idea of an impending bullish move is supported by some fundamental signals. For instance, Solana’s Network Value to Transactions (NVT) ratio recently dropped to a two-week low. The NVT ratio essentially measures how well the network’s transaction volume is supported by its market cap. When the NVT ratio drops, it typically indicates that transaction throughput is outpacing the network’s market cap, suggesting that Solana is heating up and that its current price may not accurately reflect its underlying activity.
Further reinforcing the bullish case is Solana’s TVL, which has experienced notable growth in recent weeks. As of May 2025, Solana’s TVL has surged by nearly $3 billion, reclaiming the $22 billion mark—a level not seen since mid-February. Back then, Solana was trading at 41% higher levels than its current price. This valuation gap hints that the market has yet to fully catch up with the platform’s growing fundamentals, and much of Solana’s potential is still untapped. This presents a prime opportunity for investors and traders to take advantage of what appears to be an undervalued asset.
The rapid movement of capital into Solana is also visible through changes in stablecoin supply on the network. In just a short period, stablecoin supply on Solana has plummeted from $13.09 billion to $11.71 billion—its sharpest drop in nearly three months. This drawdown is a clear indication that capital previously sitting on the sidelines in stablecoins is now rotating into risk-on assets like Solana, with investors positioning themselves for potential price movements. This shift reflects growing bullish sentiment and the fear of missing out (FOMO), which tends to drive price rallies in the cryptocurrency market.
The real signal for Solana’s potential price surge lies in the structural demand across the network. Addresses holding more than 1,000 SOL tokens have increased from 22,406 to 23,009, signaling that mid-tier whales are quietly building their positions in anticipation of a move higher. Along with this accumulation, Open Interest (OI) on Solana has surged from $5.45 billion to $6.60 billion, suggesting that speculators are taking on more leverage and becoming more convinced in their directional bets. This rising OI is a sign of growing conviction among traders, which often precedes significant price movements in cryptocurrency markets.
All of these indicators suggest that Solana is setting up for its next big move. With liquidity increasing, conviction rising, and market participants positioning themselves for a breakout, Solana appears to be coiling, ready to make a decisive move. If the bulls manage to breach the $180 resistance level, it could trigger a chain reaction of events. First, the shorts could be squeezed, leading to additional buying pressure. Second, FOMO-driven entries could flood the market, propelling Solana further toward price discovery.
In conclusion, Solana’s strong fundamentals, coupled with a growing demand for the token, suggest that a breakout is on the horizon. Traders and investors should keep a close watch on the $180 level, as it will be a key resistance point. If the bulls manage to clear this hurdle, it could fuel a rally that takes SOL to new heights, potentially setting the stage for significant price discovery in the coming months. As always, however, investors should remain cautious, as volatility in the cryptocurrency markets can lead to unexpected reversals. But for those who believe in Solana’s potential, the current price action presents a compelling opportunity.
