Solana (SOL) price extended its slide on Sept. 17 as a major network outage over the past week — pointing to heightened security risks — hit traders’ vertrouwen.

The SOL/USD exchange rate fell up to 13.27% to its intraday low of $133.53 in a corrective trend that began after it topped out near $221.38 op sept 9. Als gevolg, SOL’s price has crashed by almost 40% since its all-time high last week, despite more than tripling its value in the past 30 dagen.

Outage hurts SOL price

Solana backers tout its layer-1 blockchain solutions as a direct competitor to Ethereum. That is mainly due to its potential to ensure higher speed and lower transactions costs than the world’s leading smart contracts platform.

Echter, op sept. 14, Solana suffered a denial-of-service disruption, wherein a spike in transaction load — of up to 400,000 per second — overwhelmed its network. Als gevolg, Solana’s mainnet beta suffered 18-hours of instability, forcing decentralized applications (dApps) working atop its blockchain to become unusable.

The root cause of the issue was reportedly a decentralized exchange, Raydium. On it, bots attempted to buy SOL tokens and, als resultaat, flooded the network with up to 400,000 transacties per seconde. Aan de andere kant, Solana validators failed to prioritize transactions, causing a chain split.

SOL/USD rates fell up to 19.17% naar $137.15 op sept. 14, only to rebound sharply later to close the day at a 6.47% verlies. niettemin, the sell-off continued in the next sessions, driven by fears that Solana is more centralized than its top rival Ethereum.

Gavin Wood, the co-founder of Ethereum and another rival blockchain network Polkadot, pointed out that Solana functions with anexclusive and closed set of servers,” which somewhat increases its network’s speed but comes at the cost of lower decentralization.

The comments appeared as Ethereum successfully withstood against the same attack.

In a tweet issued on Sept. 16, Solana promised to take more proactive steps against potential hacking attempts. The foundation also announced that it would publish adetailed post-mortemanalysis in the coming weeks.

Bull flag e

SOL/USD expects to resume its prevailing bullish momentum despite the price correction as it paints a classic technical structure with an upside outlook.

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Dubbed Bull Flag, the pattern forms when the price consolidates lower in a descending channel (FLAG) following a strong move upward (FLAGPOLE). Uiteindelijk, the price breaks above the channel’s upper trendline, typically rising by as much as the Flagpole’s height.

SOL/USD four-hour price chart featuring Bull Flag pattern. Bron: TradingView.com

Solana’s recent price action has led it to form a similar Bull Flag pattern. Als gevolg, its next attempt to break above the Channel’s upper trendline could lead its price as high as the flagpole’s height, which comes to be around $107.

Als gevolg, SOL/USD could reach $250.

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