Solana recently asked validators on its network to upgrade to Testnet.v1.18.15 to resolve congestion issues following an outage that lasted four hours due to increased demand for SOL. The upgrade is expected to improve network performance, as Solana has not been operating at full capacity. Historically, resolving congestion issues has resulted in an increase in SOL’s price. Despite this, SOL’s price was at $159.33, a 4% decrease in the last 24 hours, with daily active addresses on the network dropping to 1.4 million from 1.9 million on June 6th.
The decrease in network activity has also impacted Solana’s revenue and fees, with revenue falling below previous levels on June 5th. Additionally, SOL’s volume has decreased to $1.51 billion from $3 billion on June 7th, indicating a decline in interest in the token. The increase in volume coupled with a falling price could indicate more selling than buying, strengthening the downtrend and potentially causing SOL’s price to drop further to $155. Open Interest (OI) is another indicator supporting a potential price decrease, with OI in Solana down to $2.19 billion, suggesting a decrease in net positioning.
Despite these indicators, the value of SOL may begin to slowly move upwards in the days to come. The Solana Foundation also announced the removal of some validators from its delegation program due to sandwich attacks, where attackers manipulate price action to profit from the difference. Moving forward, investors should keep an eye on SOL’s performance, as the token’s price could be looking at a rise towards $165 if network activity improves. However, if active addresses continue to decline and OI remains low, SOL might struggle to rebound in the short term.
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