Week in Solana: Trump Tariff Cataclysm Tanks Crypto

SOL tanks 16% to $204! $2B+ liquidated in 24h! Raydium flips Uniswap! Let's unpack this brutal week in Solana

Solana had a turbulent week, with escalating concerns over U.S. trade policy and a wave of liquidations leading to a sharp decline in SOL’s price, described by some as a “flash crash.” However, the Solana ecosystem showcased resilience with continued activity in DeFi and NFTs.

After hitting highs of $313 last week, Solana’s price took a steep downturn, reaching lows of $204.62 and briefly dipping into the $184 range before recovering slightly. The asset closed the week down around 16% from last week.

Solana’s total market capitalization now stands at $99.71 billion, highlighting the impact of the downturn on the network. Its total value locked, a key metric for DeFi activity, has also fallen to $10.45 billion. Active daily users, an off-chain participation metric, fell to 5.2 million as we attempt to understand recent events with market traders and investors.

The week’s events also saw a decline in decentralized exchange trading volume on Solana, which fell by 34%. This drop in trading activity comes amidst a broader downturn in the crypto sector, where market uncertainty and volatility have impacted investor sentiment.

However, Solana remained a focus of attention with Coinbase's announcement to launch futures trading on Solana. If realized, this could generate renewed interest in Solana for a largely unenthusiastic market and, in particular, may serve to attract institutional investors to the asset through the derivatives trading that futures embody.

Despite the market turbulence, Solana showcased strength in the NFT and DeFi sectors.

Capturing 50% of total NFT user activity, Solana dwarfed its nearest competitor, Ethereum, which had only 17% of total NFT user activity. This shows that Solana is growing in the presence of digital collectibles. Why? Lower fees and faster processing speed make Solana a preferred choice of NFT traders and collectors.

The DeFi sector now has 9.5% of its total DeFi TVL locked in Solana. This places it above Tron (TRX) in terms of how much capital is locked up in decentralized applications. That’s a good place to be. It suggests that confidence in Solana’s DeFi sector is on the rise, notwithstanding the ongoing bearish conditions across the crypto market.

However, not all assets fared well. Though the gold-backed stablecoin PAXG managed to achieve a slight uptick of 2.81%, the AI16Z token took a nosedive of 40.42%, signaling a clear move away from speculative assets in the broader sell-off.

Some projects in the Solana ecosystem made gains, despite the overall downturn. Cropper leaped up 97.58%. Sanctum shot up even more, to 104%. These gains showed that some DeFi protocols still had very strong and very positive upward price movements. In fact, alongside decentralization, the price gains for Cropper and Sanctum still had us asking if Solana DeFi was the place to be.

The MUSK token stood out as one of the best performers, soaring 135.8%. The surge happened for reasons that are not exactly clear, but the price movement certainly indicates that some of the old and new narratives surrounding the Solana ecosystem are still managing to grab traders’ attention.

It is interesting to note that although Solana’s total market capitalization dropped, the trade volume on the network went up by 50%. This points to the existence of substantial trading and liquidity on the network, even in a market that has otherwise been experiencing downturns. And it raises the question of why, in the midst of a sinking market, Solana appears to be experiencing not only stability but also growth.