Solana, the high-speed blockchain that was once hailed as an Ethereum killer, finds itself in choppy waters. After reaching an all-time high of $203 in March 2024, the cryptocurrency has seen a major correction, currently trading at $145. Analysts warn of a potential free fall, citing external market forces and internal ecosystem problems.
Related reading
Solana's descent: The shooting star loses its luster
Technical indicators paint a bleak picture for Solana. Alan Santana, a prominent cryptocurrency analyst, notes the emergence of bearish candlestick patterns such as shooting stars and inverted hammers, along with lower trading volume. These signals indicate a possible loss of momentum and investor confidence.
Further fueling bearish sentiment, the broader cryptocurrency market has entered a correction phase. Bitcoin, the industry leader, has fallen from its highs, dragging other digital assets down with it. This market-wide decline weakens overall demand for Solana, pushing its price down.
✴️ Solana 4X SHORT (222% earning potential)
Solana peaked in March 2024, along with Bitcoin.
One month later, in April 2024, the market correction was confirmed. This is confirmed by the fact of breaking the support, in this case we have a “maximum” pattern.➖ Notice the shooting star… pic.twitter.com/JKynUDENJd
– Alan Santana (@lamatrades1111) May 11, 2024
Solana's internal struggles: network congestion and disagreements between founders
Aside from external market pressures, Solana faces internal challenges that threaten his stability. The network experienced periods of congestion, which hampered transaction speed and scalability. These obstacles undermine Solana's core value proposition of being a faster, more efficient alternative to Ethereum.
To make matters worse, recent public spats between founders of prominent projects at Solana have overshadowed the divide over the ecosystem. Such internal conflicts raise concerns about the leadership and long-term viability of the platform.
At the time of writing, Solana was trading at $145. Chart: TradingView
Solana: Can he weather the storm?
The current situation represents a critical turning point for Solana. The future of cryptocurrency depends on its ability to overcome these challenges.
On the one hand, some analysts remain optimistic. Investment giant Franklin Templeton recently identified Solana as a potential contender for third place in the cryptocurrency market, highlighting its potential for long-term growth.
Related reading
In addition, the upcoming Breakpoint conference in Singapore, a large gathering of the Solana community, could serve as a catalyst for renewed investor confidence.
Solana's story is not over yet. It remains to be seen whether he will emerge from this storm as a resilient leader or fade into the background. The coming months will be crucial to determining the cryptocurrency's long-term trajectory.
Featured image from Reformed Journal, chart from TradingView
