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Solana Network Struggles To Process Transactions With Record 75% Failing — What’s Next For SOL Price?

Last Updated April 5, 2024 11:39 AM
Nikola Lazic
Last Updated April 5, 2024 11:39 AM
By Nikola Lazic
Verified by Peter Henn

Key Takeaways

  • Solana transaction failure rate hits 75% amid memecoin frenzy.
  • Critics and proponents debate impact of bot spam on failures.
  • SOL price volatility reflects network’s operational challenges and speculation.

The Solana network faces challenges due to an overwhelming influx of memecoin transactions, leading to a record failure rate of approximately 75% for “non-vote” transactions. 

This surge in activity has sparked significant discussion and concern among users. Many are expressing frustration over failed transactions and a diminished user experience. Despite these issues, some community members argue the failure rate data is being misinterpreted, suggesting most of these failed transactions result from “bot spam” rather than genuine user transactions.

Solana has been known to face these difficulties and has stopped processing transactions altogether numerous times. From April 1, when it peaked just above $200, we saw a 16% downturn. Today, SOL is worth around $170. 

Is it spam?

Critics, including Altcoin Sherpa, have voiced dissatisfaction with the network’s performance, albeit optimistic about Solana‘s potential for retail adoption. On the other hand, Helius  CEO Mert Mumtaz has downplayed the significance of the failure rate, attributing much of the failed transaction volume to bots attempting arbitrage, which typically doesn’t impact regular users due to pre-transaction simulations conducted by wallets.

Mumtaz also mentioned that upcoming network upgrades, like the 1.18 Solana upgrade, might not address these user experience issues directly, hinting at the need for networking patches to alleviate congestion. Solana CEO Anatoly Yakovenko also highlighted the challenges of dealing with network congestion and the limitations of quickly deploying fixes.

Solana (SOL) Price Analysis 

On March 18, SOL’s value spiked to $210, but by March 20, it had plummeted 21% to $162. Following this dip, Solana began to recover, with SOL forming what appeared to be an ascending triangle pattern. Its recent peak at $200 is touching the pattern’s resistance level.

Daily chart

This encounter with resistance led to a price rejection, pushing SOL back to the start of its latest upward trend. This retreat may indicate underlying market weakness. Analysis of the wave structure hints this could mark the end of an ending diagonal pattern, potentially signaling substantial future decline.

Within this larger five-wave impulse sequence, the ascending triangle represents the fifth wave, concluding in a truncation that barely reaches the height of the preceding peak. A drop below the ascending support line would confirm a bearish outlook, indicating SOL’s trajectory towards a new low, surpassing the dip observed on March 20.

The initial downside target is $160, mirroring the magnitude of the previous drop. Should this movement evolve into a broader downtrend, a descent to the 1.618 Fibonacci extension level at $130 could happen.

Disclaimers

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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