Solana continued its downward trend, falling for four consecutive days as a sea of red engulfed the crypto industry.

Solana (SOL), the fifth-biggest cryptocurrency, retreated to $135 on Thursday, Oct. 3, its lowest point in over three weeks. It has also moved into a local correction, falling by 16% from its highest level last week.

Its sell-off coincided with the ongoing retreat of most Solana meme coins. Dogwifhat (WIF) has dropped in the last three consecutive days. Other tokens like Popcat (POPCAT), Cat in a dogs world (MEW), and Book of MEME (BOME) have all retreated. According to CoinGecko, the market cap of all Solana meme coins retreated by 7% to $7.8 billion.

More data shows that Solana has continued to gain market share in the decentralized exchange industry. According to DeFi Llama, the weekly volume handled in its ecosystem has risen by 46% to $9.25 billion, making it the second-biggest player after Ethereum, which processed tokens worth $9.6 billion.

Most of the gains were in Raydium, whose volume rose by 71% to $4.3 billion. It was followed by Orca, Phoenix, and Lifinity, which processed transactions worth $3.1 billion, $933 million, and $734 million, respectively. 

Additionally, Solana’s ecosystem is doing well as the total value locked rose to over $5.06 billion, the highest point since 2022. Six of the biggest networks like Jito, Kamino, Jupiter, Marinade, and Raydium have achieved a $1 billion in TVL. 

The ongoing Solana sell-off is mostly due to rising geopolitical risks. The NYT reported that Israel was considering launching a war with Iran. Such a war will likely stir inflation, pushing central banks to slow down on interest rate cuts.

Solana price could form a death cross

The daily chart shows that the Solana price has formed a series of lower highs and lower lows since March. It has also found a strong support at $121.65, where it struggled to move below since April 12.

Solana is approaching the 50% Fibonacci Retracement level, while the 200-day and 50-day Exponential Moving Averages are about to form a death cross. Such a formation would likely trigger more sell-off, with the initial target being at $121.65. A break below that level will validate the bearish breakout and lead to more downside.