While everything is going on, the SOL‘s recent decline has formed a typical bullish continuation structure, with a profit objective of above $250.
The price of Solana (SOL) continued to fall on September 17, as traders’ trust was shaken by a large network failure the previous week, which pointed to increased security threats.
A corrective trend began when the SOL/USD exchange rate peaked at around $221.38 on September 9 and had a drop as high as 13.27 percent, taking it to its intraday low of $133.53. As a result, the price of SOL has fallen by over 40% from its all-time high last week, despite having more than tripled in value in the last 30 days.
Outage hurts SOL price
Proponents of layer-1 blockchain systems like Solana claim that Ethereum is in direct competition with them. This is mostly because it has the ability to provide faster transaction speeds at cheaper transaction costs than the world’s most popular smart contract platform.
A surge in transaction demand of up to 400,000 transactions per second overloaded the network on September 14, resulting in a denial-of-service interruption. Since Solana’s MainNet Beta had 18-hours of instability, dApps built on its blockchain have been rendered useless.
Raydium, a decentralized exchange, was the source of the problem, according to reports. Bots tried to acquire SOL tokens on the network, flooding it with up to 400,000 transactions per second, flooding it with transactions. The Solana validators, on the other hand, did not prioritize transactions and the chain broke as a result.
A 19.17 percent drop in SOL/USD rates to $137.15 occurred on September 14th, however the pair quickly recovered to end the day down 6.47 percent. Despite this, the sell-off persisted in the following sessions because to concerns that Solana is more centralized than its leading rival Ethereum.
According to Ethereum co-founder Gavin Wood, who also co-founded Polkadot, a competing blockchain network, Solana uses a “exclusive and restricted group of servers,” which boosts the network’s performance but reduces its decentralization.
The remarks surfaced after Ethereum successfully resisted the similar onslaught.
On the 16th of September, Solana vowed in a tweet that he would be more proactive in the fight against hacking efforts. In addition, the foundation said that it will publish a “full post-mortem” examination in the following weeks.
Despite the market drop, the bull flag SOL/USD anticipates its bullish momentum to return as it depicts a typical technical structure with an upward view.
In technical analysis, a “bull flag” is a chart pattern that appears after a significant upward rise (flagpole). When the price finally breaks through the channel’s top trendline, it generally rises by the same amount as the Flagpole.
A bull flag pattern has formed in Solana’s price movement recently. Since its previous attempts have failed to break above the upper trendline, its price may soar as far as the height of a flagpole, which is around $107.
As a result, the SOL/USD exchange rate may approach $250.
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