Impact of Solana Network Difficulties on Price. ⁉️
Solana (SOL), a standout performer amidst the ongoing crypto bull run, finds itself grappling with persistent network challenges. Despite its impressive performance, recent network outages have cast a shadow over its trajectory.
The root cause of these challenges primarily lies in the surge of on-chain activity, including transactions involving meme coins and decentralized exchanges (DEXes). Shockingly, up to 70% of non-voting transactions have failed in recent weeks, indicating a significant increase in transaction failures.
Since the beginning of 2022, the network has weathered approximately six major outages and endured 15 days of partial or complete disruption. The most recent setback occurred in early February 2024, lasting over five hours, attributed to a bug in Solana’s Just-in-Time (JIT) compilation cache.
🔹Impact on SOL's Price and Future Trajectory
Despite the network's turbulent performance, SOL has managed to maintain its price above $170, with a modest 2% gain in the last 24 hours. However, investor confidence remains fragile, with concerns looming over the network's reliability.
Persistent congestion could potentially trigger negative sentiment and lead to a decline in SOL's price. Analysts emphasize the importance of SOL maintaining support above $184 to sustain its bullish run, with acceptable downside volatility wicking into $173.
CoinCodex, leveraging artificial intelligence (AI), forecasts bullish sentiments for SOL in the short term, envisioning a surpassing of the $200 mark and trading around $230 by April 11.
🔹Current Status and Long-Term Outlook
SOL is trading at $175, down over 10% for the week. The long-term effects of network congestion on its price are unclear, as SOL has shown resilience despite the outages.
Solana's price depends on market sentiment and network solutions' effectiveness. Investors are cautious amid challenges, scrutinizing Solana's stability and its impact on SOL's price.
