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Solana Price Climbs Above $200 Despite Network Congestion — What Next For SOL?

Last Updated March 18, 2024 2:35 PM
Nikola Lazic
Last Updated March 18, 2024 2:35 PM
By Nikola Lazic
Verified by Peter Henn

Key Takeaways

  • Solana aims for $1 trillion cap, facing Ethereum.
  • Severe network congestion challenges Solana’s performance.
  • Price trends suggest the nearing of an Elliott Wave cycle is approaching.

Solana is becoming a frontrunner in the blockchain market. The platform is aiming for a $1 trillion market cap and positioning itself as the preferred platform for retail investors, potentially surpassing Ethereum. Its user-friendly features and focus on retail, especially with the explosion of meme coins, highlight its appeal. However, the network faces significant challenges with congestion and performance issues that impact its reliability and transaction efficiency.

Solana’s price is up above $200 despite these hurdles, so how do these fundamentals impact its price? 

Solana Blockchain Gets Congested 

Despite Solana‘s marketing as a high-speed, cost-efficient alternative to Ethereum, recent on-chain data reveals severe network congestion. Average ping times between nodes have stretched to 20-40 seconds. With a substantial loss rate of 30-50%, there are now transaction delays and a failure rate of up to 80%. Contrary  to its claims of 50,000 transactions per second (TPS) capacity, observers have seen the network’s actual throughput max out at as little as 1,100 TPS under heavy load conditions. This discrepancy is partly due to the inclusion of vote transactions in the TPS calculation, which does not accurately represent the throughput for other types of transactions.

The surge in investor interest, particularly in DeFi and meme coins on Solana, has contributed to these issues. High spam levels and Miner Extractable Value (MEV) activities overwhelm the network’s capacity, exacerbating the congestion problem. Outages and concerns over network stability have hurt Solana in the past. Meanwhile, current performance issues are still an issue.

The network’s alignment with retail investor interests and growth potential underscore its position as a compelling investment opportunity. However, addressing network congestion and stability issues will be crucial for Solana to become a dominant force in the blockchain space and achieve a $1 trillion market cap.

Solana (SOL) Price Analysis 

Since September 2023, Solana’s price has embarked on an upward trajectory from a notable low of $17, initiating its third Elliott Wave cycle. This rise reached its zenith in December, leading to anticipation of a corrective phase for price stabilization, particularly around the critical support level of $80. In January, a rebound from this support level began another rally, breaking through the descending resistance line.

Daily chart
SOL’s price is overextended


This breach has set the stage for what appears to be the start of the Elliott Wave sequence’s final fifth wave, targeting an immediate milestone of $200. The future beyond this target, whether Solana will continue its upward momentum or face a correction, remains to be seen.

There are no signs of struggle, but the price is, according to the daily chart,  overextended, with the RSI going above 88%. The current $205 level could serve as resistance, causing a downturn, or SOL could revisit its all-time high of $260 before doing so.

Either way, SOL is in its ending wave, so a significant correction should begin upon its completion. 



Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.


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