Solana (SOL) saw a notable drop in decentralized finance (DeFi) activity in February. According to DeFiLlama, the total value locked (TVL) on the network was flat throughout February before falling below $250 million.
Source: DeFiLlama
That’s not all. The total volume of all decentralized exchanges (DEXs) on the Solana blockchain is steadily decreasing each week. As of press time, cumulative trading volume over the past seven days was just over $280 million, down nearly 20 percent from the previous week.
Source: DeFiLlama
The Bonk (BONK) token launched last December has energized the Solana ecosystem. As part of a marketing strategy, half of the 100 trillion token supply has been airdropped for free to the community, including NFT builders and creators. This created explosive hype for the token meme, helping to revive Solana’s activity in the process.
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However, with BONK’s key metric falling, Solana will face difficulties, especially considering that BONK has lost nearly 25% of its value in the past seven days. In addition, data from Dune Analytics shows that the number of daily active users and the number of transactions are declining.
Source: Dune Analysis
Initially, Solana DEXs like Orca attracted a large number of trading pairs involving BONK. But as the value of BONK dropped, so did its trading volume. This explains the aforementioned decrease in trading volume on Solana’s DEX. With the value of BONK falling and hype, sentiment towards SOL has also moved into negative territory. However, its presence in NFTs allows the ecosystem to continue to grow. Daily volumes regularly hit the $1 million mark in February, driven by new product launches.
Source: Santiment
Additionally, the price of SOL has dropped by more than 10% in the past seven days, according to data from CoinMarketCap. Support at $20.85 was broken on Feb. 10 and remains down more than 2% over the past 24 hours.
SOL/USD | Source: TradingView
Increased sales activity dragged the relative strength index (RSI) below the neutral 50 level. However, the drop was not enough to make a bearish forecast. On-balance volume (OBV) is starting to rise, which means buying activity may pick up.
The whole play reiterates that the volatility of memecoins based on hype and awareness will be key, rather than relying on any technical or fundamentals.
- Solana (SOL) Slips After DeFi Project Shuts Down
- Solana DEX volume plummets as BONK loses hype
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According to AMBCrypto
