An altcoin backed by FTX CEO Sam Bankman-Fried is following broader crypto market trends as it struggles with concerns about repeated network outages and centralization. A bearish setup forming on the charts risks further price correction.
Billionaire-backed altcoin on the verge of 35% correction
Rising wedges on technical charts typically result in collapses. It is also resolved after a price drops below the lower trendline. It suggests that if the price follows the breakout scenario, the wedge will fall by the maximum distance between the upper and lower trendline. SOL is currently far from any major crash. However, it is trading in a falling wedge range as shown in the chart below.
If the price dips below the lower trendline while accompanying an increase in trading volumes, Solana price risks falling to $30, according to analyst Yashu Gola. In other words, Solana price will see a 35% correction by September.
Conversely, a bounce from the lower trendline will cause a sudden rebound near $53.50. In this scenario, SOL bulls will target $58. If so, a decisive break above the upper trendline will invalidate the downtrend setup.
$SOL daily close above $45
Entered 25% size (bear market size)
will stop with close under $42 otherwise targeting $56-60 https://t.co/US0ucViHN6 pic.twitter.com/xo7zfDGMrZ
— Pentoshi 🐧 (@Pentosh1) August 13, 2022
Fighting FUD
Solana’s escalating wedge collapse pattern emerges as it struggles with a host of negative events, including repeated network outages, centralization concerns, and a widespread exploit targeting Solana wallets.
However, SOL rallied about 40% in August. The $8 million hack resulting from a vulnerability in Slope wallets was the first hurdle of the rally. Solana price returned some of these news gains.
After an investigation by developers, ecosystem teams, and security auditors, it appears affected addresses were at one point created, imported, or used in Slope mobile wallet applications. 1/2
— Solana Status (@SolanaStatus) August 3, 2022
Similarly, Solana released its first report on August 10, in response to accusations that its network was centralized. He reported that Solana’s PoH mechanism has over 1,900 block producing nodes worldwide. According to the report, about 88% of these nodes are operated by independent entities.
Additionally, in May, Solana developers focused on implementing the first phases of the Mainnet Beta v1.10 series. They also took the time to implement QUIC and Quality of Service (QoS) packages by share weight and fee priority to defend the network against potential disruptions.
According to James Trautman, a researcher at Messari:
It seems that the network is showing signs of stability after version 1.10 as lower transaction fees occur and the daily transaction count reversed the trend between mid-May and late June.
Solana’s transactions per second (TPS) have soared from as low as ~700 during network outages to all-time highs of over 3,000 after the release of version 1.10. Trautman added:
If the implementations of v1.10 and later continue to stabilize along with successful ecosystem growth strategies, fundamentals will likely move in a positive direction and there may be network value as well.
