The decentralized exchanges (DEX) that operate on the Solana blockchain network, have experienced a significant slump in trading volume recently. Data analysis from Artemis’ dashboard revealed that as of the 26th of May the volume was $984 million, a stark contrast from the $1.5 billion observed just three days prior. This reduction in volume is all the more surprising given the record high from last April, when Solana’s DEX volume stood at $60 billion.
This recent cooling trend suggests that traders’ interest in the memecoins based on Solana may be waning. The status of SOL, the native token of the Solana ecosystem, could be negatively impacted by this declining interest. At the time of writing, SOL is priced at $161.49, compared to nearly $190 a few days back.
When detailing trading dynamics, it’s important to note that the demand for SOL is generally tied to the memecoin trading activity. The majority of memecoins need SOL for exchanges, so if the demand for memecoins decreases, the bids for SOL would likely follow suit.
Another trend to watch in Solana’s near term trajectory is the open interest (OI), which represents the value of all open positions in a contract; it serves as a bullish signal if trending upward. However, data from Santiment reports that Solana’s OI has declined from almost $2.2 billion on the 20th of May to $1.9 billion, indicating less money is entering the market, which could weaken the potential for a price uptick.
Lastly, it’s worth noting that Solana is currently lagging behind in blockchain activity compared to other competitors like Aptos and Sui. If these projects outpace Solana in a sustainable way, the platform might lose some of its market value and price. However, if this trend reverses, Solana could soon enjoy renewed growth.