Raydium (RAY) has recently experienced significant selling pressure, causing a steep decline in its price due to market uncertainty and negative sentiment. The token has seen a 21.04% drop as its price fell below the $4.20 key support level, which had previously served as a critical threshold for the asset’s price stability. This price dip has raised concerns among investors about the future of Raydium in the Solana ecosystem.

The recent drop in RAY’s price can largely be attributed to a rise in market fear, uncertainty, and doubt (FUD), which has led to panic selling among traders. The increased market activity was reflected in a 65.74% rise in trading volume within just 24 hours. This surge in volume suggests that traders are actively moving in and out of positions, further contributing to the volatility of the asset.

On the technical side, Raydium has been facing a bearish breakdown. After falling below the $4.20 support, RAY broke out of its right-angled ascending broadening pattern, signaling a continuation of its downward momentum. As of the latest data, RAY was trading at $2.41, representing a more than 27% drop from its earlier price point. With the current market conditions, analysts have identified the next major support level at $2.20, which could be a critical point for potential price stabilization.

The increase in selling pressure has also led to a decline in Raydium’s on-chain metrics. For instance, its Open Interest has dropped by 33.85%, signaling that fewer traders are holding derivative contracts on RAY. Additionally, the Funding Rate has turned negative for the first time in months, further indicating that the market sentiment is leaning toward bearishness. The Relative Strength Index (RSI) currently stands at 26, which suggests that RAY is in oversold territory, though the strong bearish momentum still persists.

Furthermore, Raydium’s Total Value Locked (TVL) has seen a steady decline, falling to $1.213 billion as of the most recent data. This drop in TVL reflects a reduction in the overall liquidity within the platform, signaling that traders and investors are pulling their assets out due to the prevailing market uncertainty. Additionally, a surge in the network’s active addresses points to panic selling, as many investors rush to exit their positions.

Despite the current negative sentiment, there are still some signs of potential recovery if buyers step in to defend critical support levels. At present, the $2.70 mark appears to be an important level to watch. If this support can hold and attract buying volume, Raydium could experience a reversal toward the $3.50-$4.00 range. However, if selling pressure continues and the market remains dominated by bearish sentiment, the price could dip further toward the $2.20 support level.

In conclusion, Raydium’s market outlook remains uncertain as the token faces significant bearish momentum. Traders are closely watching key support and resistance levels to gauge the future direction of RAY’s price. If the current trend continues, RAY may struggle to regain upward momentum unless the market sentiment shifts and buying pressure increases. The next few trading sessions will be crucial in determining whether Raydium can stabilize or continue its downward trajectory.