The recent surge in Solana-based meme coins has abruptly cooled down, leading to a significant decline in trading activity on decentralized exchanges (DEXes). On-chain data reveals a 42-day low in DEX volume on Sunday, underscoring a broader downturn in user activity on the Layer 1 (L1) blockchain.
The past week witnessed a temporary spike in interest surrounding Solana’s meme assets, driving up prices. However, as the hype subsided, trading volumes on DEXes, where many of these tokens are traded, plummeted by a staggering 72%. This sharp drop brought Solana’s daily DEX volume to $897 million on Sunday, marking the lowest point since June 30.
The decline in DEX volume is a symptom of a broader trend. Solana’s overall user activity has also experienced a significant drop. The number of daily active addresses, a key metric indicating network engagement, fell by 19% over the past week. This reduction in user interaction has led to a 2% decrease in Solana’s fees and revenue.
The price of SOL, Solana’s native token, is trading at $146.31 at press time, up 19% in the past seven days. However, the Chaikin Money Flow (CMF) indicator suggests a state of indecision in the market. With the CMF resting on its center line at 0, neither buyers nor sellers have a clear advantage. This neutral stance increases the likelihood of a price breakout in either direction. SOL could potentially climb to $148.27 if buying pressure intensifies, or it might dip to $133.64 if selling pressure prevails.
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The cooling down of the Solana meme coin frenzy and the broader decline in network activity raise questions about the sustainability of the blockchain’s momentum. While the recent price increase of SOL is a positive sign, the underlying market dynamics suggest a period of consolidation and uncertainty.
