Solana Drops again
It sure has been a wild ride Robyn L. Jan. 7 ,2022
Well, here we are again, another week of Solana struggling to get back to the greatness it had during the summer of 21'. This week has seen the performance of Solana take a dive and multiple times at that.
At the time of this writing, Solana is sitting at a price of $139.13 per coin- a far cry from the over $200 we saw last summer. But what can be the cause of the drop in price lately? The Solana blockchain is no stranger to a few woes and trials as it is still in its early stage. Let’s take a look at what could possibly be setting these events off.
Now as you should know the definition of leverage is to use borrowed capital for (an investment)with the expectation that the profits made are going to be greater than the interest payable. A lot of traders leveraged trades on Solana and that in turn could be the reason that the integrity of the coin has been damaged. Every time someone closes a leveraged position the value will head back into negative territory, especially if it is a lot of traders doing it at the same time. The previous two drops and slowdown of Solana could possibly have a few investors wary of what is going on in the Solana ecosystem and thus closing their leveraged accounts.
The United States
The stock markets themselves are dropping at a high rate lately and as we all know when that happens Crypto itself sees a decline. Bitcoin has seen considerable drops as of late and when BTC drops so do all other coins as well. There is a possibility that the US Federal Reserve plans to raise interest rates may be a determining factor as well. The Coronavirus epidemic still ongoing in the US could also be a determining factor as the new omicron variant has indeed had an effect on all forms of trade in the stock market.
There is no secret that Solana has had a few hiccups with its network and speed. There have been multiple instances where the network has come to a halt due to offerings happening on the blockchain. This week alone Solana has faced two incidents of network degradation. According to the team at Solana, this is due to a rise in high compute transactions. The slowdown saw the network throttled to only a few thousand transactions per second. A few thousand per second may sound like a lot until you recall that Solana is capable of 50,000 transactions per second at peak performance. This past Tuesday, Jan 3, 2021, Solana featured a slowdown in performance and Thursday had another instance that was very close to Tuesday’s. Again these instances of a slowdown are said to be the results of DDoS attacks. Anatoly Yakoveniko, the founder of Solana, replied to this issue in a statement saying it was the “pain of getting a new runtime commercialized”.
We all know instilling doubt and fear is a very powerful tactic that has been used a lot in projects as of late. At this time Justin Bons the Chief Investment Official of Cyber Capital went on Twitter to state his disapproval of Solana as a whole in a very long and detailed thread…
This type of FUD could also be the reason that the price of SOL has seen a decline in the past week.
Whether the project makes it or not is up to how the team at Solana can get things going back in the right direction, whether investors and retail purchasers can see a future , and whether projects continue to grow on the blockchain. Keep in mind there are many new projects coming to Solana and one of the greatest Metaverse projects -Solice- is just around the corner!