Solana price has been stuck in a deep bear market as the volume in its decentralized exchanges and futures open interest dipped.
Solana (SOL) has risen for two consecutive weeks and was up by over 33% from its lowest point in August. Still, it remains in a bear market after falling by over 30% from the year-to-date high.
Solana’s DEX volume retreats
Its price action has mirrored that of other cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), which are all in a bear market.
Solana’s sell-off has happened as the volume in its DEX platforms has fallen in the past few weeks. Data by DeFi Llama shows that its DEX volume dropped by over 45% in the past seven days. In this period, it has handled transactions worth $7.12 billion while Ethereum has processed $8.9 billion.
Solana’s DEX volume has retreated because of the ongoing meme coin sell-off. Top Solana memes like Dogwifhat, Bonk, Popcat, and Book of Meme have all tumbled by over 50% in the past few months.
Solana has become the most popular chain for creating meme coins, due to fast speeds and low transaction costs. The launch of Pump.fun, a meme coin generator, has made it easier for people 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, futures open interest on Aug. 18 stood at almost $2 billion, the same level it has been in the past five days. The interest is much lower than the July 30 peak of $3.08 billion.
The waning open interest is likely because of the significant liquidations that happened earlier this month as cryptocurrencies slumped.
Solana’s bulls suffered liquidations worth over $39 million while shorts liquidations totalled $21 million on Aug. 8.
Solana has bullish technicals
On the positive side, Solana has found strong support at the 50-weekly moving average, where it failed to move below earlier this month.
The coin has also formed a doji pattern, which is characterized by a small body and long upper and lower shadows. It is one of the most popular reversal signs in the market.
Additionally, Solana has formed a cup and handle pattern, a sign of a bullish continuation. Therefore, the coin may continue a bullish trend in the coming weeks as buyers target the key resistance of $180.