Why Is Solana Dropping? SOL Breaks Below $150 as Devs Battle Network Downtime

The price of Solana is dropping following news that the network has suffered an extended downtime now stretching up to ten hours. SOL started the day around $180. However, it is currently trading at $148 as the market tries to decide the short-term (and perhaps long-term) price action for the cryptocurrency.

Solana downtime

The price correction follows five days of bearish performance for Solana and can be directly attributed to Solana’s main net downtime, as well as buyer exhaustion.

Why is Solana Down?

On Sep 14 at 12:31 UTC, the Solana developer team reported that the project’s main network was experiencing some “instability.” The team noted that they are aware of the problem and were currently looking into it.

Solana Network Status

(Source: Status.solana.com)

Given that a similar situation occurred on Sept 2, expectations were that the error would be quickly resolved. However, efforts to stabilize the network turned futile, with network validators reportedly electing to restart the network.

Was Solana hacked?

No. The downtime on the Solana network is reportedly the result of bots set up by users to claim tokens in an initial decentralized exchange offering (IDO) on Solana-based exchange, Raydium. The increase in transactions ultimately resulted in the network peaking at a 400,000 transaction per second (TPS) capacity.

After attempts to stabilize the network failed, validators opted to restart the blockchain to its original state before the incident. An updated version has already been released with instructions from validators on how to install it. Based on Solana’s consensus mechanism, at least 80% of validators are required to get things going.

Solana Crash: Will Prices Recover?

Time will tell how the price of Solana reacts as the project gets its network back online. At this though, SOL is currently trading above the minor support area at around $140.

A break below that level could signal further price drops, which will not be entirely unexpected after the massive price increase from the coin in recent weeks. However, prices could recover quickly if the market shrugs off news of the network’s downtime, as it has done in the hours following the incident.

Solana Back Online

After the initial restart failed as a “result of an overflow bug,” the network validators coordinated a second restart which turned out to be successful. Solana’s downtime has now been fixed with all systems fully operational at the time of writing this line.

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