Solana continues to capture investor interest despite recent denial of service attack

Solana faced a major roadblock last week, which witnessed its network go offline for over 17 hours. Despite the outage, SOL continued to gain traction among institutional investors as it recorded inflows of nearly $5 million last week.

Solana addresses reasons behind rare outage

The Solana Foundation issued an explanation that pointed out that the network was overwhelmed by a flood of incoming transactions, which reached over 400,000 per second at one point. 

The network was flooded at the launch of an initial decentralized exchange (DEX) offering that was hosted on the Solana DeFi protocol Raydium. The transactions involved overburdened the network’s distributed nodes, leading to a crash due to the amount of memory being used. This eventually led to the halt of the network’s block production as it could not reach a consensus over the blockchain’s status.

The Solana Foundation’s report stated that the cause of the network stall was due to a denial of service attack. The blockchain’s validators decided to update and restart the network, which created a hard fork from the last confirmed block.

The effort to coordinate the restart effort required 80% of validators to get the network to start running again after 14 hours. According to the report, this issue was a rare occurrence, and the Solana Foundation aims to complete a further robust technical postmortem in the coming weeks.

Despite the setback on the network, Solana investment products witnessed inflows of $4.8 million last week. According to the report from CoinShares, this suggests that investors were happy to shrug off last week’s attack, further indicating that they view it as a small hurdle rather than an inherent issue with the network.

Solana price slides, but support is nearby

Solana price has fallen since the attack last week and appears to be searching for support. SOL may be trapped in a tight range for the time being but could discover a foothold nearby.

Solana price has been teetering within a descending parallel channel on the 4-hour chart. The prevailing chart pattern suggests that SOL is consolidating following its all-time high on September 9.

Although the technical pattern suggests that the sentiment is bearish, Solana price should be able to discover immediate support at the 200 four-hour Simple Moving Average (SMA) at $128. The following line of defense will emerge at the lower boundary of the parallel channel at $120, which sits near the 50% Fibonacci retracement level.

Given that Solana price was able to endure the attack without slicing below the downside trend line of the technical pattern, further losses are not expected unless a massive wave of sell orders materialize.

The next line of resistance for Solana price is at the middle boundary of the chart pattern at $142, which sits near the 61.8% Fibonacci retracement level.