The price of Solana (SOL) fell on June 3, reducing its net loss on paper to 85%, seven months after hitting a high above $ 260.
The price of SOL fell more than 6.5% in one day to $ 35.68 after failing again and convicting it from its 10 – month low.
Now sitting at a historically important support level, the SOL / USD pair could see an upward reversal in June, targeting the $ 40-45 area, up about 25% from today’s price.
60% drop in SOL price to come?
However, a rebound scenario is far from guaranteed and Solana is facing upside while trading at the same rate as bitcoin (BTC), the major currency (through market capitalization) that typically influences on the trends of major altcoins.
In particular, the weekly correlation coefficient between BTC and SOL as of June 4 was 0.92.
In addition, Solana is likely to incur even greater losses than BTC if bitcoin falls deeper below the current $ 30,000 psychological support level.
Meanwhile, the Federal Reserve appears to be determined to raise benchmark interest rates and shrink its balance sheet. Because of this heavy-handed policy, more risky assets like bitcoin have a chance to fall, hurting Solana’s bullish outlook.
A break below the current SOL support level – around $ 35 – increases the likelihood of a decline in the $ 18-25 area, which acted as a strong support zone between March and July 2021, and preceded a 1200% price rally as shown. below.
This bearish scenario would put SOL almost 60% below today’s price.
Solana network gaming
The bearish outlook for SOL also comes as the Solana blockchain faces repeated outages, making its network virtually useless for its major dapps, including the Solend loan protocol and the Decentralized exchange serum, for hours on end.
Solana’s latest software glitch appeared on June 1 and caused the network to be down for 4.5 hours. The largest blockchain outbreak occurred in January and lasted nearly 18 hours.
Validation operators successfully restarted a cluster of Mainnet Beta at 9:00 PM UTC, after a break of about 4 and a half hours when the network failed to reach a consensus. Network operators and dapps will continue to overhaul client services over the next few hours.
– Solana Status (@SolanaStatus) June 1, 2022
Commit Operators managed to restart the Mainnet Beta at 21:00 UTC, after a break of about 4.5 hours because the network failed to reach a consensus. Network operators and dapps will continue to overhaul customer service over the next few hours. – Solana Status (@SolanaStatus) June 1, 2022
The breaches are likely to scare investors in favor of competition from Solana and many traders have already migrated.
Just sold my share $ SOL for $ ADA. Solana is a great project but personally I cannot, in good faith, continue to invest in series 1 which often stops down (partial and major breaks about 11 hours).
– $ Smac07_NFT $ (@ Shawn_Deezy07) May 31, 2022
I just sold all my $ Sol for $ ADA. Solana is a great project but personally I cannot in good faith continue to invest in series 1 which often crashes (partial and major failures about 11 times). # ADA #Cardano – $ Smac07_NFT $ (@ Shawn_Deezy07) 31 May 2022
Miles Deutscher, independent market analyst, rushes cryptocurrency investors have been cautious after witnessing the recent Terra fiasco. Still, the analyst says Solana’s outages will decrease over time as the network matures.
Read also: Alchemy announces support for Solana Web3 apps the day after blockchain shutdown
“But if they fail to cancel such events, then another L1s [blockchains de couche 1] it will continue to eat up its market share, ”he said.
8 / However, the reasons I like Solana still stand:
• Scales using one global state (liquidity is not fragmented).
• Low cost and fast (despite handling the largest number of transactions in any chain).
• 3rd most developed chain (Electric Capital)
• Large list of VC supporters– Miles Deutscher (@milesdeutscher) June 2, 2022
8 / However, the reasons I love Solana remain the same:
– Scaling using a single global state (liquidity is not fragmented).
– Low cost and speed (although it handles most transactions for any blockchain).
– 3rd most developed blockchain (Electric Capital)
– Large list of VC funders
– Miles Deutscher (@milesdeutscher) June 2, 2022
The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investments and trades involve risk, you should do your own research before making a decision.
