Solana (SOL) has been under significant pressure, struggling to hold above the $130 mark for the past week. Over the last 30 days, the cryptocurrency has corrected by nearly 36%, reflecting broader weakness across the crypto market. This downtrend is partly driven by mixed signals from Solana’s Total Value Locked (TVL) and whale activity, both of which highlight a cautious market sentiment.

Solana TVL Struggles Below $9 Billion

One of the key indicators contributing to Solana’s bearish outlook is its Total Value Locked (TVL), which currently stands at $8.57 billion. TVL measures the capital held across the decentralized finance (DeFi) protocols on a blockchain, and a lower TVL can signal weaker investor participation and lower liquidity. Since February 23, Solana’s TVL has remained consistently below $10 billion, reflecting reduced capital inflows into its ecosystem.

Solana’s TVL was at an all-time high of $14.24 billion in January but has since been in steady decline. This decrease mirrors the broader cautious sentiment prevailing in the market. Despite this decline, there has been some stabilization recently, with TVL bouncing back slightly from a low of $8.11 billion on March 10. This suggests that there may be signs of a potential shift in sentiment, but Solana has yet to regain its previous momentum.

Whale Activity Shows Cautious Accumulation

Another important aspect of Solana’s market sentiment is whale activity. Whale addresses, or wallets holding at least 10,000 SOL, have shown a slight increase, rising to 5,031 from 5,008 just two days ago. While this marks some accumulation, it is still below the 5,053 whales recorded on March 3, signaling that the larger investors have not fully returned to the market.

Whales are often seen as key market movers due to their ability to influence prices through large buy or sell orders. The uptick in whale addresses could indicate that some major players are beginning to accumulate Solana once again, but the number still remains below recent highs, pointing to a more cautious investor sentiment. This cautious approach is reflected in the broader market as whales are hesitant to make significant moves without clearer indications of a trend reversal.

Solana Faces Key Support and Resistance Levels

At present, Solana’s price is trading within a tight range, with support found at $120.76 and resistance at $131. The current downtrend in the market raises the possibility that SOL could retest the $120.76 support level in the near future. Should this support level fail to hold, Solana could face further declines toward the next major support zone at $112. This would signal a deeper correction within the current bearish market structure.

On the other hand, if SOL can regain positive momentum and break through the immediate resistance at $131, there could be potential for a move towards higher levels. A successful breakout above $131 might pave the way for a rise to $152.9, and further bullish sentiment could push the price even higher to $179.85.

The Outlook for Solana

The key to Solana’s short-term future lies in its ability to break above resistance levels or hold crucial support zones. With the market showing signs of consolidation, Solana’s price could either continue its downward pressure or shift into a more sustained uptrend, depending on how the support and resistance levels play out.

At the moment, caution is warranted as the crypto market continues to show mixed signals, and investor sentiment remains subdued. If whale activity continues to rise, it could provide some upward momentum for Solana, but a breakout above critical resistance levels will be necessary for a more bullish outlook.

In conclusion, Solana’s price action is being heavily influenced by the market’s cautious sentiment, as reflected by its TVL and whale activity. The cryptocurrency faces important support and resistance levels, and how it performs in the coming days will be crucial in determining its direction moving forward.