Solana network hit by congestion, price attempts recovery in the short-term
- The second congestion in a week hit the Solana network due to high computational transactions.
- The world’s largest exchange notified users that Solana withdrawals could be suspended from time to time.
- Analysts predict a short-term bounce in Solana price based on the volume profile and the 200-day exponential moving average.
Solana has suffered from network outages several times over the past eight weeks. The spike in transactions on the network directly reduces its capacity and results in transaction failure.
Solana network suffers from failed transactions
While facilitating high computation transactions, the Solana network experiences massive congestion. This hampers the network’s ability to process transactions. The world’s largest exchange Binance announced the suspension of Solana withdrawals from time to time.
The exchange cited the concerns around the Solana network’s outage and congestion. Repeated network outages have negatively impacted trader sentiment on Solana.
Analysts have evaluated the Solana price trend and predicted a short-term bounce in the altcoin. @AltcoinSherpa, a pseudonymous crypto analyst, believes that Solana price may not have bullish potential based on the given volume profile and the 200-day exponential moving average of the area.
The analyst believes there may be a short-term bounce in Solana price, at a minimum.
$SOL: Given volume profile and the 200D EMA of this area, I think this area is a solid area to bid. While I'm not sure what the longer time frame outlook is for this, I think that we should see some short term bounce at a minimum. #Solana pic.twitter.com/DGD5MeBUJf
— Altcoin Sherpa (@AltcoinSherpa) January 8, 2022
The spike in fees on Ethereum layer-1 solutions has resulted in a migration of projects and users to the Solana network. The increasing migration and on-chain activity have negatively impacted Solana price and the network’s performance.
Frequent outages have resulted in increased critique from users in the Solana ecosystem. Exchanges have started notifying users of the implications of failed transactions on the Solana network.
FXStreet analysts believe that Solana price shows bullish divergence. Analysts have set a target of $157 for Solana price.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
