- Solana’s TVL has held steady despite recent price volatility.
- This disconnect between on-chain fundamentals and market price suggests a potential undervaluation.
On the 11th of May, Solana [SOL] traders were hit with a sharp reality check.
A sudden 2.64% drop from the $180 level wasn’t just another dip. Instead, it was backed by a massive 347.55% spike in realized profits, hinting that seasoned holders were quietly offloading into strength.
As the exits clogged, shorts smelled blood, setting the stage for a brutal $7.86 million long squeeze that wiped out overexposed positions.
The silver lining? That liquidity sweep laid down fresh supply and handed SOL shorts a prime entry point.
Now, all eyes are on the bulls.
If they spark a supply shock, these opportunistic shorts could get trapped, giving SOL the fuel to bust through the $180 resistance and target higher levels.
The clock’s ticking
At this point, Solana’s undervaluation is quickly becoming a bull’s playground, offering just the kind of setup that fuels strategic risk-on behavior.
The latest confirmation? A sharp drop in the NVT (Network Value to Transactions) ratio, now sitting at a two-week low.
Source: Glassnode
In simple terms, Solana’s transaction throughput is outpacing its market cap. Hence, a sign that the chain is heating up under the hood.
But the real kicker is TVL. So far in May, Solana has added nearly $3 billion in Total Value Locked, reclaiming the $22 billion mark last seen in mid-February.
The kicker? Back then, SOL was trading 41% higher than current spot levels.
This valuation gap suggests the market hasn’t caught up with the fundamentals yet – another indication that capital deployment is still in its early stages, with much of the potential yet to be realized.
Sideline capital eyes Solana’s potential
Since Solana’s 25% weekly surge, stablecoin supply on the network has plummeted from $13.09 billion to $11.71 billion – its sharpest drop in nearly three months.
This rapid drawdown is a textbook sign of sidelined capital rotating out of stablecoins and diving into risk-on assets.
In other words, it’s a clear indication that FOMO is starting to rear its head, with liquidity flooding into Solana. But where’s the flow landing?
Source: Artemis Terminal
The real signal lies in the structural demand: Addresses holding >1k SOL jumped from 22,406 to 23,009 – mid-tier whales quietly building positions.
Meanwhile, Open Interest surged from $5.45 billion to $6.60 billion, suggesting heightened speculative leverage and directional conviction.
All signs suggest Solana is coiling for its next big move. Liquidity is in place, conviction is rising, and the setup is textbook.
If bulls breach the $180 barrier, it won’t just spark a breakout – it could trigger a chain reaction: Short liquidations, FOMO-driven entries, and a fast-track ride toward price discovery.
