The daily trading volume of decentralized exchanges on Solana (SOL) has decreased. According to Artemis data, as of May 26, the volume was shown to be $984 million. Three days earlier, this figure was over $1.5 billion. The decline contrasts with the blockchain’s record in April. During the same period, Solana’s DEX volume reached a record level of $60 billion when aggregated monthly.
Price Movement in SOL
Considering the past fall and the approach of the end of May, the total volume for the month might be less. The previous volatility could be linked to the meme token craze on the network. Therefore, the decline might mean that the interaction with meme tokens launched on Solana is no longer as high. Additionally, this development seemed to have pushed the ecosystem’s native token, SOL, into the background.
At the time of writing, the price of SOL is $161.49. A few days ago, the value approached $190. If the DEX volume continues to decrease, SOL might follow suit. The reason for this is that the demand for the cryptocurrency is relatively dependent on meme token transactions. Although some meme tokens allow swaps with USDC, most require SOL. Therefore, if meme token purchases decrease, SOL offers are likely to drop. Besides this, other metrics could also predict the next direction of Solana’s price.
Critical Metric in Solana
An important metric in Solana was the open interest (OI). According to Santiment’s data, OI dropped to $1.90 billion. As of May 20, this value was nearly $2.20 billion. OI is the value of all open positions in a contract. If it increases, it could mean that net positions are increasing and more money is entering the market. In this case, the increase serves as a bullish signal. The shared graph showed that while OI jumped, the price of SOL rising to $188.45 was a good example. However, this decline might mean that liquidity taken from SOL contracts has increased.
Therefore, the strength of a possible upward trend was weakening. If this continues, the price of SOL might keep falling and could rise to $145.90. Additionally, it was reported that Solana was starting to lag behind other blockchains in terms of activity. Some projects that gave Solana a run for its money were Aptos (APT) and Sui (SUI). However, it remains uncertain whether these projects can consistently outperform Solana transactions and withstand the test of time. In such a case, Solana might lose a portion of its market value along with its price.
