In an exciting development for the Solana (SOL) community, the number of network addresses holding a minimum balance of 0.1 SOL has skyrocketed to over 11.1 million, marking the highest level seen in months. This growth indicates a strong surge in user adoption, as evidenced by the metrics that have steadily climbed since late December 2024, despite a notable price correction.

Despite the recent spike in user engagement, Solana's Total Value Locked (TVL) has taken a significant hit, dropping from a staggering $11.7 billion at the start of the year to approximately $6.2 billion. This decline raises questions about the sustainability of Solana's DeFi ecosystem, especially considering the rising network activity juxtaposed against plunging TVL figures.

Interestingly, the surge in addresses is a telling sign of renewed interest, particularly among smaller retail investors who appear to be accumulating SOL in anticipation of potential long-term gains. This sentiment aligns with the data from Glassnode, which revealed a growth from around 9.2 million addresses in late December to over 11 million by March 21.

While this user base expansion is promising, it also coexists with a concerning drop in TVL, suggesting a decrease in capital allocation within the DeFi sector. Macro financial volatility and reduced incentive programs may contribute to this trend. Nevertheless, the current TVL level remains significantly higher than the base levels seen during the pre-bull market phase of 2023.

As for Solana's price outlook, it currently trades below both the 50-day moving average of $135.50 and the 200-day moving average of $188.05, indicating a broader bearish sentiment in the market. However, the Accumulation/Distribution Line shows consistent upward movement, suggesting that savvy investors are entering at current price points.

The market may experience rangebound movement in the short term, especially with visible resistance around the $135 mark and relatively low trading volumes. Yet, the ongoing on-chain growth could provide the necessary momentum for future positive price action.

In summary, with solid foundational demand despite recent speculative pullbacks and the potential for a price alignment with its network strength, Solana could be gearing up for another bullish rally. Could now be the perfect moment for investors to take a closer look?