Solana was once hailed as a revolutionary blockchain offering faster and cheaper transactions than Ethereum (ETH). However, on February 6 2024, it suffered its its 11th network outage in just two years. This recent disruption, which stopped block production dead in its tracks, has reignited concerns over the network’s stability and reliability. As a platform that prides itself on speed and efficiency, the inability to maintain consistent uptime is a glaring issue, especially in a space where trust and reliability are paramount.
These persistent technical difficulties raise questions about Solana’s future and its cryptocurrency, SOL. With the blockchain community watching, this latest outage tests the patience of users and developers and puts the network’s aspirations to be a leading decentralized ecosystem at risk.
The price of SOL already fell by 4% after the news. With these things in mind, will this pattern of outages lead to more downside in the short term?
The network faced a notable pause when it failed to produce a block for more than 25 minutes, a significant delay given Solana’s usual block time of 400 milliseconds. This incident was labeled a “major outage,” exacerbating Solana’s technical hurdles, including recurrent downtime and its reliability and stability challenges.
Since its launch in March 2020, technical issues have marred Solana’s ambition to offer a scalable solution. The frequent outages have shaken the confidence in its long-term viability, raising questions within SOL’s community and among blockchain enthusiasts.
Engineers are investigating the cause of the latest outage, and the community is awaiting updates on the resolution.
As the turmoil sets in, the price of Solana continues to drop. It fell by 4% on February 6, from a high of $97 to a low of $93. Before then, it was already in a downtrend since reaching a high of $102 on February 2. This means it has dropped by more than 10% in less than a week. There are two possibilities ahead, but both point to a short-term decrease.
If things are bearish, SOL is in its corrective stage, with its January 30 high of $106 being the end of wave B. The February 2 high was a lower one, indicating a downtrend. In this scenario, we could see another major drop below its horizontal support of $80, with the next likely stopping point at the $60 area.
If things are bullish, the correction ended on January 28 on a $78 low, with the next uptrend being the start of a bigger one. If this is true, the downtrend from January 30 is a local correction. This should keep the price at a higher low, preferably above $87.
If it manages to do so that and starts showing some positive signs, Solana could start another upturn towards a higher high of $160 and above.
In conclusion, what happens in the current decline will dictate the future outlook. If it continues past the $80 area, a larger drop would be expected, while if it holds above $87, the outlook could remain bullish.
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