Solana liquidity drops 29% amid declining trading volumes

Solana (SOL) is experiencing a significant decline in market liquidity and trading activity. Data from CoinGecko indicates that order book depth within 2% of the market price has decreased by approximately 29% compared to last year, falling from roughly $28 million per side to $20 million. This reduction in pending buy and sell orders suggests that large transactions may now cause more volatile price swings due to the weakened capacity to absorb significant market pressure.

Complementing this liquidity trend, Solana's trading volume has seen a sharp decline. Recent reports show a 62.38% drop in 24-hour trading volume compared to the 30-day average. While the price has remained around the $120 mark, the ratio between volume and market capitalization has fallen to 1.95%, down from a previous average of 5.19%.

Ethereum (ETH) is also seeing a thinning of liquidity near its market price, though measurements differ due to the specific price ranges analyzed. While Solana's depth is measured within a 2% range, Ethereum's depth is measured within a 0.15% range, where it remains relatively liquid across most exchanges.