Ripple’s native asset XRP has reclaimed the sixth rank by crypto market cap as its total value stands at $50.4 billion. That comes after Solana lost the spot as its market cap hovers at $47.8 billion. After rallying to a new high, SOL has struggled in the past sessions, losing more than 30% in around ten days.
Solana rose to a record high more than a week ago, hitting $214.96. However, the token has sustained downswings in the last ten days. Solana plunged to explore the $135.25 lows on Friday, translating to a 37.08% loss from its all-time high. Though the ugly moves, SOL trades over 150% high over the past month.
The primary reason behind Solana’s massive loss is the downtime that its mainnet beta suffered, forcing developers to restart the network. Solana lost more than 17% on the day the service disruption happened. The problem surfaced due to a magnified transaction load (400,000 transactions per second), devastating SOL’s ecosystem. With that, the alt’s mainnet beta sustains instability for almost 18 hours. That rendered Solana’s DApps unusable.
Raydium decentralized exchange emerged to be the contributor to the downtime. Its bots flooded the Solana network as they tried to purchase SOL assets, accounting for the nearly 400,000 transactions in a second. At the same time, SOL validators did not prioritize the transactions, thus a chain split.
Ethereum co-founder Gavin Wood stated that SOL operates with exclusive servers. Wood further declared that that increased speed in its network but results in lower decentralization. The developments made investors lose confidence in Solana, reflected in the asset’s price.
Though the token seem to pick up after developers solved the issues, investors may be skeptical about investing in ETH since the platform suffered a similar attack but failed to survive it. That’s evident since centralized exchange witnessed Ether worth $1.2 billion withdrawn a day on Friday.
While writing this article, Solana trades at $162. However, some analysts believe that SOL still has the power to surge towards $250. Their speculations come from the bullish flag that the Solana network formed.
Do you think that SOL’s rally has ended or the altcoin will rise again? You can share your thoughts below.