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Solana’s price faces uncertainty due to recent network issues and negative sentiment, but some analysts believe it could surprise with a price surge.
- The price movement of Solana is consolidating, and a symmetric triangle pattern suggests there may be a breakout or crash.
Solana (SOL), one of the prominent altcoins in the cryptocurrency market, is experiencing turbulent times. As per Santiment’s network sentiment indicator, recent market sentiment reflects prevailing negativity towards Solana, exacerbated by a network outage on Feb. 6. The resulting downturn in sentiment has cast a shadow over the asset, with many investors expressing apprehension about its future trajectory.
The Solana price trajectory has recently been marked by volatility and uncertainty. Technical analysis reveals a consolidated price action indicative of weak buying and selling pressure in the crypto space. Within the past seven days alone, SOL recorded a correction exceeding 10%, underscoring the bearish sentiment prevailing in the market.
Outlook and Potential Recovery
Due to the prevailing market conditions, speculation has been raised on the possible trajectory of Solana’s price movement. Though the mood is still pessimistic, some analysts see a potential turnaround. Radical investors believe that the current negativity surrounding SOL could present a chance for an upswing in price, typically seen when market sentiment reaches a low point.
Analysis of technical indicators, notably the Moving Average Convergence Divergence (MACD), reveals mixed signals for Solana’s price trajectory. While the MACD histogram depicts a decline, indicating weak price action, the possibility of a bullish or bearish convergence remains uncertain. The outcome of Solana’s impending breakout from the symmetric triangle pattern will likely determine its short-term direction.
Should the market break out of the symmetric triangle pattern, SOL will face immediate resistance at $181, with further upside potential towards $192. Conversely, a breakdown from the pattern could trigger a bearish trend, testing support levels at $169.50 and potentially plummeting towards $159.50. SOL is poised for a significant breakout while trading inside this pattern.
Solana Faces Congestion Woes
The Solana blockchain is currently grappling with congestion issues, leading to significant delays in transaction processing and a surge in dropped transactions. This congestion has primarily been attributed to an influx of spam transactions as bots vie for priority over regular users. The popular Phantom wallet app and other applications on Solana have alerted users to expect prolonged wait times for transaction completions.
In the first quarter of 2024, the Solana network experienced a notable surge in memecoin activity, with a record number of new tokens debuting on Solana decentralized exchanges (DEXs). This uptick in memecoin frenzy has attracted increased interest from both new and retail users, drawn by Solana’s reputation for affordable transaction fees.
However, this surge in activity has led to an unprecedented demand for the network’s block space, resulting in congestion and hindered access for many users. While the current congestion issues pose significant challenges for the Solana network, optimism remains about its prospects.
Despite the congestion woes plaguing the Solana network, the native cryptocurrency SOL has exhibited resilience in adversity. At the time of writing, SOL’s price has seen a modest increase of nearly 2%, trading at $182.76.