- Analysts on crypto Twitter buying the dip, expect SOL price to resume upward climb after dropping to $130.
- Solana price has failed to recover from the drop triggered by a network outage on September 15.
- One server in Amazon's data center accounts for 37.45% of Solana, essentially making it a "kill-switch" for future outages.
SOL consolidation continues, and analysts are convinced that the altcoin still has upside potential.
SOL fails to recover outage-triggered drop, recovery expected
Solana's on-chain activity has exploded over the past four months and the altcoin posted over 118% gains over the past 30 days. Since a network-wide outage on September 15, the altcoin price has failed to recover, though.
1/ Solana Mainnet Beta encountered a large increase in transaction load which peaked at 400,000 TPS. These transactions flooded the transaction processing queue, and lack of prioritization of network-critical messaging caused the network to start forking.
— Solana Status (@SolanaStatus) September 14, 2021
Proponents conclude that one of the key triggers in SOL's consolidation is the outage that lasted over 15 hours. Traders in the crypto community were initially drawn to the Solana network for its low-cost transactions and faster processing times; however, the downtime highlighted the need for better network infrastructure and further decentralization.
Mira Christanto, a Senior research analyst at Messari, a crypto research and data platform, informed users that if 33% of Solana's network suffers an outage, the blockchain protocol will not validate transactions.
Furthermore, this is a cause of concern for traders that emphasize on "decentralization", since 45% of Solana's validators are hosted in just two data centers.
If 33% of $SOL's network goes down, @solana can't confirm transactions. This data center hosts 15% of Solana's active network stake. 2 datacenters account for 45% of validators.
— Mira Christanto (@asiahodl) February 28, 2021
Alerted last week: https://t.co/aVR2bi3bBx pic.twitter.com/GZjLdaMRqa
Interestingly, a single server in an Amazon data center (Amazon-02) holds enough stake in the Solana network to act as a "kill switch." Amazon-02 accounts for 37.45% of Solana that is currently staked.
Despite the ongoing consolidation, @AltcoinSherpa, cryptocurrency analyst and trader, has decided to buy SOL once it hits $130. At the time of writing, SOL is trading at $140.54.
$SOL: I think buying from here to $130 is a decent play. I'll buy a little bit here I think. #Solana pic.twitter.com/NQS7mNgeIs
— Altcoin Sherpa (@AltcoinSherpa) September 17, 2021
@Pentosh1, leading pseudonymous analyst and trader on crypto Twitter, observed that traders who tried catching the knife suffered losses. The analyst is surprised by the rebound in SOL price after capitulation.
Please help! Does anyone know why the price of $SOL is bouncing so hard off support after capitulation? It's up almost 10% off the lows! SEND HELP!!!!! https://t.co/HpqxejvcuV
— Pent◎shi Wont DM You (@Pentosh1) September 17, 2021
FXStreet analysts expect the altcoin to rally to $276.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ethereum whales turn bullish with Shanghai upgrade less than a month away
Ethereum (ETH) whales holding between 1,000 and 10,000 ETH have been scooping up the altcoin consistently for a week. With the countdown to the Shanghai upgrade and the ETH token unlock event, there is a spike in Ethereum demand among retail investors.
Ripple price to close the week with a bang as next week will be crucial for another 20% profit
Ripple price is closing this week with very profitable numbers, even if a fade is ongoing. The fade occurred after bulls received a firm rejection at $0.50 and have been trading lower from that level since. If bulls can keep their hands on this momentum and the Relative Strength Index (RSI) is not overbought, at least some 20% profit is being prepared for next week.
Will Cardano price advance as analysts call it one of the favorite altcoins next to EOS and COLT to pop?
Cardano (ADA) price is making the cut and has been shortlisted by several analysts that have put ADA in their top altcoin, primed to explode to the upside soon. ADA is flirting with a second week of gains and could recover its attempt to hit $0.415 as a crucial level for any further uptrend or downtrend.
Is the new partnering-up strategy the right way for Vechain price to avoid a 30% correction?
Vechain (VET) price had a busy week as several new partnerships were announced. Next to integrating with Dappradar to promote cross-chain visibility, the partnership with Boston Consulting Group might be the one that draws the most attention. Vechain price though is not taking this news in a good way and rather is at risk of tanking further.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?
Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.