SOL’S TECHNICAL ISSUES ARE BECOMING A RECURRING THEME
The first fourteen days of the last month of 2021 are already behind us, and it was not the best period for Solana at all, and not only in terms of price action either, unfortunately. While SOL (SOL/USDT) has declined in value by roughly 23.5% over the recent two weeks and is currently trading at $159, it is not the drastic decrease in price that has been causing the most concern among the asset’s investors, enthusiasts and … developers alike.
If you have followed the Solana token for a longer while, you probably must remember that the Solana Network experienced some serious hiccups back on the 4th of December 2020, when their blockchain halted and went offline for nearly 6 hours, which instantly led to a massive drop in value - by 12% on that unfortunate day, and by 33% in total losses over the following week. That first failure took place when the coin was worth just over $2 per unit and, in addition to that, the asset was only 6 months old, which made up a sufficient excuse on that occasion.
One year ago, the Solana Community was only small, especially compared to how huge it has become since, and just starting to grow in numbers, plus the ultra-fast and super-cheap specs of the blockchain were giving seemingly realistic hopes to the enthusiasts of the crypto technology that they had essentially discovered the most advanced digital asset in the cryptocurrency space in SOL.
The hype was growing fast, the number of new wallets genuinely skyrocketed and along with it, the valuation of the Solana Network’s native coin, which increased from the aforementioned $2.12 on the day of the original fiasco in December 2020, all the way up to $160 on the 14th of September, when... yet another outage took place.
This time it was a much more serious one, because the ecosystem had already been getting significantly more developed and complex than it was at the time of the first major crisis. The system went offline for over 17 hours, which caused yet another huge crash in the price of SOL, which was quite similar to the previous one in terms of the percentage loss over the following seven-day period (32% on this occasion vs 33% in Dec 20).
In the aftermath of that debacle, the developers promised to deal with the technical issues eventually, and the Solana investors decided to trust them again with their money. We know that for a fact, not only by looking at the price action, which had been nothing but spectacular practically all year long, or at least until the token’s value hit the ATH of $260 on the 6th of November, but also by the percentage of coins staked, which is the 4th highest out of all the cryptocurrencies.
EXTREMELY ROUGH TIME FOR SOLANA DURING THE FIRST TWO WEEKS OF DECEMBER
As far as the top 100 crypto by market capitalization, Solana is the leader in that aspect with 76.9% of the tokens staked at the moment. For comparison, Polkadot (DOT/USDT) is at 63% and Cardano (ADA/USDT) at 52.2%. Ethereum (ETH 2.0) only just over 5.2%, but that’s purely due to the prolonged lock-up period.
Anyway, going back to the subject of Solana’s technical failures, the September crisis wasn’t the last one unfortunately. Over the past week, we have just witnesses two more within 3 days. Now, this has been truly concerning for the investors, as these fiascos are quickly becoming a recurring theme.
Many present and potential investors alike are currently wondering, whether the network issues are ever going to be fixed up for good. Once and for all. As we have found out, over the past 7 days, as many as 7% of long-time Solana hodlers sold off their assets. This is ‘a bit worrying’ to be honest, and while we don’t know the reasoning behind their actions as they could simply have taken long-awaited profits on their assets, which they have been holding for over a year, or they might have made their decision based on the Bitcoin’s latest downtrend, we will be monitoring this piece of data for you regularly now, as it could act as a pre-warning before further sell-offs in the coming weeks or months, especially if the technical issues on the Solana Network persist.
You will find more details on the latest SOL’s problems in a separate article by clicking the link here, but first, let’s quickly discuss the situation in the chart before we finish. SOL has been on a short-term Downtrend since Bitcoin (BTC/USDT) crashed at the beginning of December, and on a more medium-term Downtrend since it hit the ATH on the 6th of November.
It’s still on a long-term Uptrend due to trading above the 200-day Moving Average, but with the recent technical issues combined with the risk of Bitcoin losing its 200-day MA soon, we don’t recommend getting involved in Solana until the devs have dealt with the pretty much ongoing crises.
Watch the $150 level for nearest support, and if that doesn’t hold, then the last hope will be in the $130-135 area before we start testing the all-important 200-day Moving Average, which hasn’t been tested as support in ages (in crypto terms). If Solana is to start regaining its position, it will first need the King’s say-so, and even then, SOL will have a mountain to climb.
The RSI is bearish, but it might be bottoming out at some point, and the MACD is also bearish. Things are looking bearish without a shadow of a doubt, but that’s just the general state of the cryptocurrency market at the moment. The silver lining is that if you are looking for a good entry position, you might see a lot of openings, but best to wait for BTC to start showing some signals of strength first. Next analysis will be on the King of Crypto, stay tuned!
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.