Solana’s TVL Falls Below $10 Billion Due to LIBRA Rug Pull and Liquidity Outflows

Solana’s Total Value Locked (TVL) recently hit a new low of $9.90 billion, marking a significant decline for the network. This depreciation is largely due to the LIBRA rug pull, raising concerns over the stability of Solana’s DeFi ecosystem.

Although the TVL has recovered somewhat to $10.3 billion, it still reflects a nearly 30% drop since mid-January. This situation prompts questions regarding the long-term health and growth of the network.

Solana’s TVL Hits New Lows

Solana’s TVL experienced a sharp decline that pushed it below $10 billion for the first time since November 2024. This drop follows a broader trend of fluctuating liquidity seen during previous downturns caused by protocol exploits and market contractions.

Historically, significant declines in Solana’s TVL have coincided with noteworthy sell-offs in the price of SOL. Recent data indicates a steep drop attributed to the LIBRA incident, which has further diminished investor confidence.

Security Concerns Persist Amid LIBRA Fallout

Despite the decline, Solana’s TVL experienced a slight rebound to $10.3 billion, suggesting some capital inflows. However, the LIBRA rug pull has caused lasting damage, heightening security and investor trust concerns in Solana-based DeFi projects.

The liquidity drained from multiple protocols following LIBRA’s collapse triggered forced liquidations, which dampened market participation. Although there was a brief surge in early February, the TVL struggled to maintain momentum, signaling shaky investor confidence across the ecosystem.

Solana’s Price Outlook

The decline in Solana’s TVL has likely contributed to SOL’s recent bearish trend, trading at $173.66 at the time of writing. The broader trend, however, remains downward. Since peaking above $260 earlier this year, SOL has steadily declined alongside liquidity outflows from its DeFi ecosystem.

In recent weeks, the Relative Strength Index (RSI) stands at 37.02, indicating dominant selling pressure. The On-Balance Volume (OBV) at 62.8M reflects reduced buying momentum.

The LIBRA fallout likely induced significant investor uncertainty, resulting in sustained sell-offs. Historically, SOL’s price reacts negatively to liquidity contractions, mirroring current trends. Although recent RSI upticks suggest potential short-term recovery, SOL’s stability remains at risk without restored confidence in DeFi security and governance. If the TVL stagnates, Solana may struggle to reclaim the $200-resistance level in the near future.