Solana (SOL) continues to demonstrate strong network growth. While the market sentiment has been subdued over the past week, the blockchain’s on-chain activity remains robust, and recent data highlights its increasing potential.

Solana’s Continued Network Activity

Solana has displayed impressive network resilience as it navigates the broader market downturn. The blockchain has recently reached a new 2024 high in terms of Total Value Locked (TVL), now standing at 55.37 million SOL. This figure provides a more accurate reflection of the network’s health compared to dollar values, which can fluctuate due to SOL’s price volatility.

The growth in TVL is often seen as an indicator of long-term optimism and healthy network activity. Despite the broader market’s bearish sentiment, Solana has maintained high on-chain volume, with daily volume averaging over $3 billion in the last two days.

Solana’s transaction count is also on the rise, marking a significant milestone in network activity. The blockchain recently processed 67.77 million transactions in a 24-hour period, the highest number of transactions recorded in the past 11 months. This surge in transaction volume indicates increasing organic demand, despite the broader market’s struggles.

Is SOL Ready for a Bullish Comeback?

While Solana’s network activity shows healthy signs, SOL’s price performance has been less encouraging over the past week. SOL experienced a 23% dip, moving from its recent high to its lowest level. However, this price movement has brought SOL into a key Fibonacci retracement range between the 0.5 and 0.618 levels, based on its September lows and November peak.

The recent dip saw Solana’s Relative Strength Index (RSI) approach oversold territory, hinting that more downside could be possible in the near term. However, at the time of writing, the price was showing signs of bearish exhaustion, indicating that the downward pressure may be losing momentum.

If Solana is poised for a bullish reversal, traders will be looking for further signs of recovery. Notably, while spot outflows were negative in the past week, their intensity has decreased in the last four days, suggesting a potential shift in market sentiment.

Market Sentiment and Recovery Potential

Despite the bearish market conditions, there are growing indications that Solana could be on the path to recovery. The drop in outflows and signs of stabilizing funding rates could be key indicators that SOL is ready for a rebound. However, there are still challenges ahead, particularly in the derivatives market, where open interest and funding rates have been negative over the last two days. This is the first time in six weeks that SOL’s funding rates have been in the negative, suggesting that short-term traders are still cautious.

On the positive side, funding rates have started to show signs of shifting back into the positive in the past 24 hours, which could signal the beginning of a recovery for Solana. If this trend continues, it could further support the case for SOL’s price to stabilize and potentially rebound.

Conclusion: Solana’s Resilient Network Could Fuel Recovery

Solana’s network activity continues to show strength, with increasing TVL and transaction volume, even amid bearish market conditions. While SOL’s price has faced significant pullbacks, the recent price dip could provide a solid foundation for potential recovery. If the price holds above key Fibonacci levels and signs of bullish sentiment persist, Solana could be on track for a strong comeback.

Investors should keep an eye on Solana’s market sentiment and on-chain data for further signs of recovery. The blockchain’s healthy network fundamentals combined with signs of reduced bearish pressure could lead to a price reversal in the near future, making SOL a potential candidate for those looking for long-term gains.