Solana (SOL) price extended its decline on September 17, when a major network outage last week – indicating heightened security risks – hurt retailer confidence.
The SOL / USD exchange rate fell as much as 13.27% to its intraday low of $ 133.53 in a corrective trend that began after peaking near $ 221.38 on September 9th last week high, although the value has more than tripled in the last 30 days.
Failure damages SOL price
Solana supporters are promoting its Layer 1 blockchain solutions as direct competitors of Ethereum. This is mainly due to its potential to ensure faster speeds and lower transaction costs than the world’s leading platform for smart contracts.
However, on September 14th, Solana suffered a denial of service outage where an increase in transaction loads – up to 400,000 per second – overwhelmed its network. As a result, Solana’s mainnet beta suffered an 18-hour instability, rendering decentralized applications (dApps) working on its blockchain unusable.
1 / Solana Mainnet Beta saw a sharp surge in transaction load, which peaked at 400,000 TPS. These transactions flooded the transaction processing queue, and the failure to prioritize network-critical messages caused the network to begin forking.
– Solana Status (@SolanaStatus) September 14, 2021
The cause of the problem was reportedly a decentralized exchange, Raydium. Bots then tried to buy SOL tokens and flooded the network with up to 400,000 transactions per second. On the other hand, the Solana validators were unable to prioritize transactions, which resulted in a chain split.
SOL / USD rates fell as low as 19.17% to $ 137.15 on September 14, but later rebounded significantly to close the day down 6.47%. Nonetheless, the sell-off continued over the next few sessions, fueled by fears that Solana is more centralized than its top rival Ethereum.
Gavin Wood, the co-founder of Ethereum and another competing blockchain network, Polkadot, pointed out that Solana works on an “exclusive and closed set of servers,” which increases the speed of its network somewhat but comes at the expense of less decentralization.
The comments appeared when Ethereum successfully withstood the same attack.
Lol, WTF is running today? $ sol goes offline for a few hours # Arbitrum goes offline for almost an hour # ethereum was attacked (unsuccessful)
– Lark Davis (@TheCryptoLark) September 15, 2021
In a September 16 tweet, Solana promised to take more proactive steps against potential hacking attempts. The foundation also announced that it would publish a “detailed autopsy” analysis in the coming weeks.
SOL / USD expects to resume its predominant bullish momentum despite the price correction as it draws a classic technical structure with upside prospects.
Related: BTC Aims for $ 50,000; Solana goes down; Is ETH “healthy money”? | Check out the market report with Charlie Burton
The pattern known as the “bull flag” forms when price consolidates downward in a descending channel (flag) after a strong upward movement (flagpole). Ultimately, the price breaks above the top trendline of the channel and usually rises by as much as the height of the flagpole.
SOL / USD 4-hour price chart with bull flag pattern. Source: TradingView
Solana’s recent price movement has caused a similar bull flag pattern to form. As a result, its next attempt to break above the channel’s upper trendline could take its price up to the flagpole level, which is around $ 107.
As a result, SOL / USD could hit $ 250.
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