- While validators were required to update to the new network, Solana’s revenue fell.
- Several indicators predicted that SOL could drop as low as $155.
Solana [SOL] has asked validators on the network to upgrade to the Testnet.v1.18.15. According to the announcement made known by Solana Status, the upgrade would help decongest the network.
Some weeks back, the blockchain experienced an outage that lasted four hours. Increasing demand for SOL caused the disruption.
However, developers on the network made efforts to awaken the network, leading to an improvement in uptime.
Despite that, Solana has not been working at 100% capacity. As such, the v1.18.15 is expected to resolve that.
SOL is not following this time
Historically, when the project resolves its congestion issues, SOL’s price tends to increase days later. At press time, the price of SOL was $159.33. This was a 4% decrease in the last 24 hours.
Furthermore, AMBCrypto looked at the network activity. According to data from Artemis, daily active addresses on Solana were down to 1.4 million.
On the 6th of June, the figure was 1.9 million, indicating that about 500,000 market participants have stopped interacting with the network.
Source: Artemis
Should the active addresses on the network continue to decrease, SOL’s price might fail to rebound. However, if network activity improves, the price of the token could be looking at a rise toward $165.
OI and volume say “no” to recovery
Besides, the decline in interaction has affected revenue and fees. At press time, Solana’s revenue was much lower than what it was on the 5th of June.
Apart from that, AMBCrypto also looked at SOL’s volume. According to Santiment, the volume was $1.51 billion at the time of writing.
This was a decrease from the $3 billion volume on the 7th of June. Volume indicates interest and could serve as strength for the direction of a token.
However, one thing we noticed was that the volume had begun to increase.
If the volume continues to increase while price falls, it means that there is more selling than buying. As such, this could give more strength to the downtrend, and the price of SOL could fall further.
Source: Santiment
Should this be the case, SOL could slip to $155. Additionally, the Open Interest (OI) was another indicator supporting a price decrease.
OI shows the amount of contracts opened in the market. When OI increases, it means that liquidity allocated to positions in the market had increased.
However, a decline suggests that traders are closing their positions, leading to a drop in money flow. At press time, Open Interest in Solana was down to $2.19 billion, according to Coinglass.
Source: Coinglass
The decrease in OI was proof that net positioning had decreased. Hence, it is unlikely for SOL to experience any major price increase.
However, in the days to come, the value of the token might begin to move upwards slowly. In addition, Solana Foundation disclosed that it had removed some validators from its delegation program.
Is your portfolio green? Check out the SOL Profit Calculator
According to the Foundations, the decision was necessary because these validators launched sandwich attacks against its users.
For context, a sandwich attack is an exploit where an attacker puts two transactions around a victims’ transaction to manipulate the price action, and profit from the difference.