Due to the LIBRA scandal and outflow of liquidity, Solana's TVL once fell below $10 billion, although it has rebounded slightly to $10.3 billion, it has still declined by nearly 30% since mid-January.
Solana's [SOL] total value locked (TVL) recently hit a new low of $9.9 billion, this devaluation is mainly attributed to the LIBRA crisis, further fueling concerns about the stability of the Solana DeFi ecosystem. Although the TVL has rebounded to $10.3 billion, the decline is close to 30% compared to mid-January. This change has undoubtedly deepened external doubts about Solana's long-term health and growth prospects.
As Solana faces these challenges, all eyes are on the impact on SOL prices and overall market sentiment.
Solana TVL hits new low
Solana's TVL has plummeted in the rankings, with the recent decline causing it to fall below $10 billion for the first time since November 2024. This change is a typical manifestation of the volatility in Solana's DeFi ecosystem liquidity, a pattern that has previously occurred during periods of protocol vulnerabilities and market contraction.
From historical data, a significant drop in Solana TVL is usually accompanied by a drop in SOL prices, especially when investor confidence is weakened by ecosystem instability. Recent data shows that the sharp decline in late January 2025 is closely related to the LIBRA incident.
Although Solana's TVL was once stable at around $12 billion, the nearly 30% contraction within a month has also exposed the fragility of its DeFi sector, reflecting the difficulty in retaining capital.
Security risks from the LIBRA crisis
Despite the rebound, Solana's TVL is still affected by the long-term impact of the LIBRA incident, further exacerbating market concerns about the security of Solana-based DeFi projects and investor confidence. LIBRA's collapse has led to a sharp reduction in liquidity for multiple protocols, triggering forced liquidations and further reducing market participation.
Although the TVL briefly surged in early February, it was unable to maintain momentum, reflecting the instability of investor confidence. This uncertainty is not limited to Solana's DeFi sector, and as market participants re-evaluate the risks of the ecosystem, the SOL price may continue to fluctuate. If Solana fails to restore trust in DeFi security and governance, the recent rebound may be temporary, and the network could face greater capital outflow pressure.
Solana price outlook
The decline in Solana TVL appears to have impacted the price trend of SOL. As of now, the SOL trading price is $173.66, up 2.87% intraday. However, the overall trend remains downward. Since breaking above $260 earlier this year, SOL has been steadily declining, reflecting the outflow of liquidity from the DeFi ecosystem. The RSI indicator is 37.02, indicating recent selling pressure. The OBV indicator is also showing a downward trend, indicating weakening buying momentum.
