🌎 Solana Drops Amid Crypto Market Decline, But Gains in DEX Market

Solana Continues Downward Trend Amid Broader Crypto Market Decline

Solana, the fifth-largest cryptocurrency, has experienced a significant decline, falling for four consecutive days. On Thursday, Oct. 3, Solana retreated to $135, marking its lowest point in over three weeks. This recent dip represents a 16% drop from its peak last week, indicating a local correction.

The sell-off of Solana coincided with a broader retreat in Solana meme coins. Dogwifhat has seen a decline for three consecutive days, while other tokens like Popcat, Cat in a Dog’s World (MEW), and Book of MEME (BOME) have also decreased. The market capitalization of all Solana meme coins has retreated by 7% to $7.8 billion.

Solana Gains Market Share in Decentralized Exchanges

Despite the recent downturn, Solana continues to gain traction in the decentralized exchange (DEX) industry. The weekly volume handled within its ecosystem has surged by 46% to $9.25 billion. This growth positions Solana as the second-largest player in the DEX market, trailing only Ethereum, which processed $9.6 billion worth of tokens.

Raydium has been a major contributor to this growth, with its volume rising by 71% to $4.3 billion. Other significant players include Orca, Phoenix, and Lifinity, which processed transactions worth $3.1 billion, $933 million, and $734 million, respectively.

Solana Ecosystem’s Total Value Locked (TVL) Reaches New Heights

The Solana ecosystem is showing robust performance, with the total value locked (TVL) climbing to over $5.06 billion, its highest point since 2022. Six major networks within the ecosystem, including Jito, Kamino, Jupiter, Marinade, and Raydium, have each surpassed $1 billion in TVL.

Geopolitical Risks Impacting Solana

The ongoing sell-off of Solana is largely attributed to rising geopolitical risks. Reports indicate that Israel is considering launching a war with Iran, which could potentially stir inflation and prompt central banks to slow down interest rate cuts.

Technical Analysis: Potential Death Cross for Solana

The daily chart reveals that Solana has been forming a series of lower highs and lower lows since March. The cryptocurrency has found strong support at $121.65, a level it has struggled to fall below since April 12.

Solana is approaching the 50% Fibonacci Retracement level, and the 200-day and 50-day Exponential Moving Averages are on the verge of forming a death cross. This formation could trigger further sell-offs, with the initial target set at $121.65. A break below this level would confirm the bearish breakout and potentially lead to more downside.