Solana DEX Volume Hits Yearly Low, SOL Under Pressure

The trading volume on decentralized exchanges (DEXs) on the Solana blockchain has dropped to its lowest level since the beginning of the year.

This reflects the decline in network activity and weak demand for its native token, SOL, whose value has fallen by more than 30% in the past month.

Solana faces liquidity crisis as DEX volume hits yearly low

According to on-chain data from Artemis, the total DEX trading volume of Solana has dropped to a new yearly low yesterday, extending the downtrend that began on 10/01.

On that day, the network's DEX activity had surged to an annual high of $36 billion. However, the subsequent decline in Solana user demand has led to a drop in trading volume on its DEXs.

By Sunday, the network's daily DEX volume had dropped to just $988 million, a 97% decline from its peak. The decline in Solana's daily DEX activity indicates a waning interest from traders and LPs.

This also coincides with the broader price decline around SOL, which has put significant downward pressure on its price.

At the time of writing, this altcoin is trading at $133.20, recording a 33% decline over the past month amid weakening demand. The drop in open interest in its futures market suggests a weakening buying pressure. Currently, it stands at $4.04 billion, down 24% over the past month.

Open interest refers to the total number of outstanding Derivative contracts, such as futures or options, that have not been settled. When it declines like this, traders are closing their positions without opening new ones.

This trend signals a lack of confidence in the market around SOL and suggests the possibility of a prolonged downturn.

SOL price hovers above a crucial support—Will it drop to $108?

At the time of writing, SOL is trading at $134.67, above the support level formed at $120.72. If the selling pressure increases, the coin's price could drop below this level. In this case, additional selling pressure could be triggered, causing the SOL price to decline to $108.23.

On the other hand, a recovery in SOL demand could drive a price increase to $136.62. If it successfully breaks above this level, the coin's price could rise to $182.64.