SOL trading has shifted to DEXs, confirmed by liquidations in latest market capitulation

Solana trading is switching to decentralized markets, with most of the recent liquidations occurring on decentralized futures platforms. The volume of perpetual swaps liquidated was double the activity on centralized exchanges.

Solana’s native SOL token is switching to decentralized demand, as DEX perpetual swaps surpass centralized exchange volumes. On-chain liquidations were 96% higher compared to trades on centralized exchanges, showing the growing demand for on-chain perpetual swaps.

Solana DEX markets record activity surge

During the latest market downturn, Solana saw over $94M in perpetual swap liquidations, compared to around $47M in centralized liquidations on derivative markets. Jupiter DEX was the biggest carrier of long liquidations in the past 24 hours.

The rush to trade SOL derivatives also put Jupiter DEX in the top 5 of Solana-based fee producers, with over $3.88M in fees for the past 24 hours.

SOL slid to $134.33 following a turbulent weekend that wiped out value from the top assets. The token also crashed to a local low of $128.30, then recovering quickly to also wipe out long positions.

Solana has been trading in a range since its recovery following the 2022 crash, and has been suitable for derivative trading on short-term volatility. Following the weekend, liquidations shrank open interest from $3.55B to $2.9B, though still leading to an expansion of long positions to 76% of all open interest.

Stabble DEX boosted SOL perpetual swaps

Until recently, SOL was mostly used as a baseline trading asset, included in meme token pairs. While other chains hosted their native perpetual DEX, SOL was mostly included in meme trading.

The recent spike in on-chain liquidations is linked to the growing activity of Stabble, one of the currently active perpetual swap DEXs on Solana.

Stabble has been increasingly active since its token launch in June. The perpetual swaps DEX is just starting out, with $3M in liquidity locked and just over $1B in monthly volumes. However, Stabble turned into the most active DEX, surpassing other Solana-based platforms, including Raydium, Meteora, and Orca.

SOL is also among the trending assets on Hyperliquid, entering the top 5 of the most active pairs. The SOL-USD pair traded with over $798M in daily volumes, with over $408M in open interest. The increased activity also drew in whales with significant positions. One of the whales is currently holding a long position on SOL with a notional value above $17M, which holds an unrealized loss of $5.7M.

The short-term market volatility also attracted an older Hyperliquid trader with a history of shorting SOL. The trader is sitting on $9.3M in unrealized gains, with other short positions also in the green. The SOL position had a notional value of $39M. The large-scale size of whale short bets may signal downward pressure on the price of the asset, but may also lead to a short squeeze.

SOL is still facing pressure from the regular unlocks of Alameda Research, as well as spot selling from fee-generating apps. The expectation for another drop closer to $100 is increasing both spot and derivative activities.