Solana price crumbles under the pressure of NFT activity on the SOL blockchain
- Solana network activity has increased consistently with the rise of NFT popularity.
- NFT minting and heavy bot activity on the Solana blockchain resulted in an outage on the Ethereum-killer’s blockchain.
- Cryptocurrencies like Ethereum and Solana have crumbled under rising NFT activity and selling pressure.
Altcoins in the crypto ecosystem are being hit by a bloodbath amidst fears of Fed interest rate hikes. However, activity in NFTs has increased on blockchains like Ethereum and Solana. Massive activity on the blockchain has negatively impacted Solana and Ethereum price.
NFTs put Solana and Ethereum price under stress
The Solana blockchain recently recovered from a seven-hour outage resulting from the significant rush of bots minting NFTs on the SOL blockchain. NFT minting programs on blockchains like Ethereum and Solana have increased the transaction activity, resulting in congestion.
The mainnet fell out of consensus on the Solana network and crashed, and validator nodes collapsed under the volume of transactions involved in NFT minting for Candy Machine. On the Ethereum network, rising activity and congestion result in higher gas fees which made the blockchain network less lucrative for investors and traders.
Proponents argue that nobody would use the SOL network if Solana doesn’t have consistent uptime. The unique proposition of SOL is its consistent uptime, high transaction speed and low cost.
Analysts have criticized the lack of activity on the Solana network when NFT minting stops. This is considered a sign of bearish sentiment among users and the lack of utility of SOL.
One thing that's very telling about the people that invest in @solana( $SOL), is the lack of price movement after the network stops minting blocks.
— big pey (@bigpeyYT) May 2, 2022
Blockchain is a critical infrastructure for value management in our society. It can't go down.#Cardano is built to last.
Analysts believe Solana price could crumble under the rising selling pressure on SOL. @CryptoCapo_, a pseudonymous analyst and trader, believes Solana price could plummet further before the Ethereum-killer begins its trend reversal.
$SOL pic.twitter.com/FuLK3Usd0a
— il Capo Of Crypto (@CryptoCapo_) May 2, 2022
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.
