- Solana (SOL) dropped 16.56% over seven days.
- Technical indicators give sell signals.
- Despite attempted updates, Solana Network still faces congestion.
The crypto market’s latest downturn is affecting most tokens, including Solana. The high-performance blockchain is seeing a noticeable decline after several months of strong performance.
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Accompanying the decline are worsening technical and the lingering congestion issues still plaguing the network despite the latest updates.
Solana’s Technicals Decline, Point to Sell
Solana’s recent decline is reflective of a broader crypto market downturn. On Tuesday, April 30, Solana traded at $128.41, showing a daily decline of 4.74%. The token also saw a weekly drop of 16.45%, down from $154.5 on the prior Tuesday. This decline resulted in a bearish turn in most of Solana’s technical indicators.
Most oscillators, including the Relative Strength Index (RSI), Stochastic %K, and Awesome Oscillator, indicate a neutral stance or sell actions. The RSI stands at 35.58, suggesting a neutral position, while the Stochastic %K is at 25.91, also indicating a neutral stance. The Awesome Oscillator registers at -22.48, reflecting a neutral sentiment.
Solana’s moving averages further confirm the bearish trend, with most indicators signaling sell actions. The Exponential Moving Averages (EMAs) and Simple Moving Averages (SMAs) for various timeframes, including 10, 20, 30, and 50, indicate sell positions. Notably, the 200-day EMAs and SMAs stand at 112.09 and 103.08, respectively, suggesting a buy signal in the long term.
The worsening technicals have also been accompanied by persistent congestion issues stemming from high DeFi and memecoin traffic. Solana’s recent attempt to alleviate network congestion with an update has not fully resolved the persistent issues.
Solana Faces Lingering Network Congestion
Despite a critical update aimed at fixing an “implementation bug” related to the QUIC protocol, the network still faces issues. On Monday, April 29, the transaction failure rate was still significantly high at 65.75%.
The update was critical for improving network performance by prioritizing transactions from more invested network participants and adjusting the handling of staked versus non-staked packets. However, the success of these updates depends heavily on widespread adoption by network validators, and the ongoing high transaction failure rate suggests that challenges remain.
This ongoing congestion impacts Solana’s reputation and could influence long-term adoption by developers and investors. This is particularly true in the DeFi and NFT sectors, where transaction efficiency is important, and Solana has been particularly popular.
On the Flipside
- Solana’s performance has closely followed that of the overall crypto market. For instance, Bitcoin lost 9% of its value over the last seven days and is currently trading at $60,800.
- So far, Solana investors haven’t reacted negatively to the congestion issues. Instead, the token largely followed the greater trend in the market.
Why This Matters
Solana’s recent struggles with network congestion and declining technical indicators could significantly impact its market position. As a high-performance blockchain that has previously enjoyed strong performance, persistent issues could deter both developers and investors.
Read more about the latest Solana update:
Will Solana Update Fix Congestion? Here’s What It Relies On
Read more about the North Korea’s Lazarus hackers:
Lazarus Evading Authorities: Blockchain and Laundering $200M
