Shadow Exchange (SHADOW) fell 4.52% in 24 hours due to profit-taking after recent incentives, technical weakness, and widespread outflows in the DeFi sector.

Profit-taking after the launch of the $3 million incentive program on July 9

Oversold RSI (21.84), but MACD signals remain negative

TVL growth in the DeFi sector slows down (+1.6% compared to a peak of +242% in SHADOW's TVL in February)

Detailed Analysis

1. Main Catalyst

Sale after incentive: The announcement on July 9 of the $3 million liquidity program (ShadowOnSonic) initially boosted sentiment, but the volume in 24 hours fell 53% to $7.9 million, indicating that early participants exited their positions.

Uncertainty in the FeeM program: Although Sonic's redesigned incentives for airdrops seek to attract capital (Blockworks), SHADOW's 62% drop over 90 days reflects skepticism about the protocol's revenue sustainability.

2. Technical Context

Oversold, but no signs of reversal: The 7-day RSI (21.84) indicates that the asset is significantly undervalued, yet prices remain below all major moving averages (7-day SMA: $15.09).

Break of Fibonacci level: SHADOW broke below the 78.6% retracement level ($16.23) on July 31, accelerating sales towards the low of $12.23.

Divergence in MACD: The MACD line at -2.38 is below the signal line at -1.51, confirming negative momentum.

3. Market Dynamics

Headwinds in DeFi: The total crypto market capitalization fell 2.27% in 24 hours, with BTC dominance rising to 61.34% as capital migrates to less risky assets.

TVL growth slows down: Despite a 242% increase in SHADOW's TVL in February (WOO X), overall TVL growth in DeFi slowed to +1.6% this week, reducing demand for DEX tokens.

Conclusion

SHADOW's decline reflects the loss of momentum after the incentive program, technical breaks, and a shift in risk appetite towards Bitcoin. It is important to observe stabilization above the low of $12.23 and the possible return of TVL flows in DeFi. Sonic's FeeM program could reignite institutional interest in SHADOW if on-chain activity starts to grow again? #JagerTime