Solana’s price has remained stuck in a deep bear market as its decentralized exchange volume and futures open interest plummeted.
Solana (SOL) has been on a two-week spree and is up more than 33% from its August low. However, the stock remains in a bear market after falling more than 30% from its year-to-date high.
Solana DEX Volume Drops
Its price action mirrors that of other cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), which are all in a bear market.
Solana’s selloff came as its DEX volume has plummeted in recent weeks. Data from DeFi Llama shows that its DEX volume has dropped by more than 45% in the last seven days. During that time, it processed $7.12 billion worth of transactions while Ethereum processed $8.9 billion.
Solana’s DEX volume has declined due to the ongoing meme coin sell-off. Major Solana memes like Dogwifhat (WIF), Bonk (BONK), Popcat (POPCAT), and Book of Meme have all dropped over 50% in the past few months.
Solana has become the most popular chain for creating meme coins, due to its speed and low transaction costs. The launch of Pump.fun, a meme coin generator, made it easier for users to launch Solana meme tokens.
Data shows that these tokens have a combined market cap of over $425 million, with Michi, Daddy Tate, Mother Iggy, and Billy being the largest.
Meanwhile, Solana’s open interest in the futures market has stalled.
According to CoinGlass, open interest in futures contracts on August 18 was nearly $2 billion, the same level as in the past five days. The positions are well below the peak of $3.08 billion on July 30.
The drop in open interest is likely due to the significant liquidations that took place earlier this month as cryptocurrencies crashed.
Solana bulls suffered liquidations worth over $39 million, while short liquidations totaled $21 million on August 8.
Solana Shows Bullish Technical Data
On the positive side, Solana found strong support at the 50-week moving average, where it failed to break below earlier this month.
The coin has also formed a doji pattern, characterized by a small body and long upper and lower shadows. This is one of the most popular reversal signs in the market.
Additionally, Solana has formed a cup and handle pattern, indicating a bullish continuation. Therefore, the coin could continue an uptrend in the coming weeks, with buyers targeting the key resistance at $180.
