Solana Extends Decline as DEX Volume Drops and Short Positions Rise Amid Stiffer Competition
Summary
- Solana (SOL) remained weak after failing to break above $98, with a 15%% correction, a retest of the $83 level and a shift to negative funding rates.
- Solana-based weekly DEX volume of about $11 billion and weekly DApp revenue of about $20 million have fallen from January averages, with DEX volume down 56%%.
- Cointelegraph said that despite the rise of rival chains such as Hyperliquid and Base, Solana still holds about $5.9 billion in TVL and remains second-largest, while trading at $84.19 on Binance.
Forecast Trend Report by Period
Solana has remained under pressure as network activity slows and competition intensifies, Cointelegraph reported.
Cointelegraph reported on May 19 that Solana has fallen about 15% since failing to break above $98 on May 11. The token later retested the $83 level on May 19, while futures funding rates turned negative.
Funding rates for Solana perpetual futures are now around -3%, down sharply from +8% last weekend. In a neutral market, that metric typically stands near +9%, indicating stronger demand for short positions in recent trading.
On-chain data also show slower activity across the Solana ecosystem. Weekly trading volume on Solana-based decentralized exchanges has fallen to about $11 billion, down about 56% from January's average of $25 billion.
Weekly revenue for decentralized applications, or DApps, has also dropped to about $20 million from an average of about $35 million in January. The ecosystem's main revenue-generating projects currently include Pump, Axiom Pro, Phantom and Jupiter.
Cointelegraph said the rise of rival chains such as Hyperliquid and Base is also weighing on Solana. Hyperliquid has been rapidly expanding its market share with its native perpetual futures trading feature, while Base is emphasizing its links to the Coinbase ecosystem.
Still, Solana remains the second-largest blockchain by total value locked, or TVL, at about $5.9 billion, behind only Ethereum. Major TVL projects include Jupiter, Kamino, Sanctum and Raydium.
Solana was trading at $84.19 on Binance's USDT market, down 1.62% from a day earlier.
