Cryptocurrency Solana
Since its creation, Solana has been positioned as a “killer of Efirium”. The main argument was the number of
transactions per second (TPS), which can range from 65 000 (achieved in tests) to 710 000 (theoretical value).
The specific Proof-of-History (PoH) algorithm and some other solutions that increase the network throughput allow to achieve such values. In short, we are talking about the blockchain synchronization algorithm and internal clocks that ensure that nodes work “on schedule”, – in conjunction with steaking.. Many other projects have been launched on the basis of this blockchain. However, for all its speed and high throughput, Solana had one big problem – very frequent system failures. It wasn’t until 2023 that some progress was made in this area.
On July 20, Solana reported on the performance of its network. In the first half of the year, the platform had just one outage, on February 25. There were no outages at all in the second quarter.
The platform had only one outage, on February 25. Meanwhile, there were no outages at all in the second quarter.. This shows the serious progress the project has made in one year. In 2022, nearly a third of January passed in disruptions.
Source: solana.com
The performance stability score wasn’t the only indication of improvements at Solana. Growth was demonstrated by the ratio of voting transactions to non-voting transactions. The former occur when the block is confirmed by validators. The second ones happen after network user actions, such as when NFTs are released. Solana itself expects the figure to decline due to greater network efficiency.
Source: dune.com
The reduction in the time it took to produce the block had a positive impact. Which means the network runs faster with transactions. The spike was on Feb. 25 – the day the glitch was observed:
Source: dune.com
The number of transactions per second was essentially unchanged, ranging from 3 200 to 4 300. TPS drawdown was observed only on February 25. At that point, the figure didn’t even reach 800 transactions per second. Such figures should not be surprising. In the test conditions, only simple token transfer transactions were considered. The data presented in the report, on the other hand, is more comprehensive and contains information on complex iterations. Buying an NFT, for example, requires more resources than a simple transfer.
Source: dune.com
What’s going on with Solana’s price? Is the platform’s good performance reflected in the cryptocurrency’s value?
Solana technical analysis
Solana had a very good stretch from June 10 to July 14. In 34 days, the SOL token rose in value by more than 150%, showing a high of $32.27 in a year and a half. Not surprisingly, after such a surge, investors and traders decided to lock in profits, and Solana began a correction. By July 24, the coin had lost just over 26% of its value.
The upcoming Federal Reserve (Fed) meeting this week may have contributed to Solana’s decline. There could be a new interest rate hike announced there, which is usually quite negative for cryptocurrencies. In any case, we can expect increased volatility after the speech of the US Central Bank representatives.
The decrease is facilitated by the withdrawal of money from the stock exchanges by large players (so-called whales). July 20
On July 20, 2 million SOL tokens (more than $51 million) were withdrawn from the Binance exchange to an unknown wallet. The next day, however, 409 823 SOL tokens (about $10.3 million) were deposited on the same platform. However, the overall negative trend is clear.
The next day, however, 409 823 SOL tokens (about $10.3 million) were deposited on the same platform. However, the overall negative trend is evident.
The main question on investors’ minds right now is when will Solana’s decline stop? So far, there are no preconditions for that. Perhaps they will appear if the cryptocurrency manages to stay above the support level around $22.3. Resistance is in the $25-$27 range. While things are quite negative in the short term, there are positive signals in the long term. Even after losing more than a quarter of its value, Solana is still trading above its 50-day moving average (indicated in green):
Source: tradingview.com
Worth adding: the coin is also far from its all-time high in value, which was over $260 in November 2021. That is the current rate is more than ten times lower than the record value. Meanwhile, Solana is currently in the top 10 cryptocurrencies by capitalization, ranking ninth (over $9.55 billion) and well ahead of rival TRON ($7.25 billion), but behind Dogecoin ($10.78 billion).
Conclusion
The Solana cryptocurrency (SOL) has significantly improved its performance in recent months in terms of network stability, delivering a June-July rise in the coin’s value. At the same time, the asset has not yet managed to move to a long-term and rapid growth with the support of bulls, and since the second half of July the rate correction was formed. The coin is far from its record highs. Pressure from U.S. financial regulators may not play in its favor.
This material and the information contained herein does not constitute personalized or other investment advice. Editorial opinion may not coincide with the opinions of the author, analytical portals and experts.