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The seventh-largest cryptocurrency by market capitalization, Solana (SOL), has had a significant decline in price over the last week, shedding over 30% of its value from its peak of US$58.38 on November 9, 2023. Analysts and cryptocurrency fans are debating whether or not the smart contract platforms bull run is finished in light of the recent drop in the price of Solana.

The goal of the blockchain platform Solana is to enable decentralized applications (DApps) and protocols that are quick, scalable, and safe. With minimal fees and great security, it claims to accomplish over 50,000 transactions per second (TPS) with its unique Proof of History (PoH) consensus technique. Through its Wormhole bridge, Solana facilitates interoperability with other blockchains, including Ethereum, Bitcoin, and Binance Smart Chain.

Solana has increased by more than 3,000% from the years beginning, making it one of the top-performing cryptocurrencies in 2023. Because of its potential and technological prowess, it has drawn significant interest and investment from institutional and retail investors alike. The ecosystem of Solana has also grown quickly; hundreds of DApps and protocols, including Serum, Audius, Raydium, and Star Atlas, are developed on its platform.

But Solana has also seen significant difficulties and failures, which have added to the companys recent stock decline. The following are a few elements that have lowered Solanas price:

The network outage that occurred in Solana on September 14, 2023, lasted over 17 hours. The reason for the disruption was a significant surge in transaction demand that exceeded the networks capacity. Because they were unable to access their cash and DApps, Solana users and developers were extremely frustrated and worried due to the outage. Along with its centralization and governance concerns, Solanas scalability and dependability were also called into doubt by the outage.

The general market slump that has impacted most cryptocurrencies over the last week has also had an impact on Solanas price decline. Several causes, including the US debt limit worry, the governmental crackdown on cryptocurrency exchanges and stablecoins, investor profit-taking, and concerns about inflation, all contributed to the market correction. Due to their extreme fear and panic over the market drop, cryptocurrency traders liquidated their holdings to limit their losses.

The growing competition from other smart contract platforms, such as Ethereum, Cardano, Polkadot, and Avalanche, also had an impact on Solanas price decline. Along with introducing new features and updates like Ethereums Cancun update, Cardanos smart contracts, Polkadots parachains, and Avalanches Apricot update, these platforms are also aiming to increase their performance, scalability, and security. Additionally, more developers and users are drawn to these platforms as they search for greater chances and alternatives in the cryptocurrency field.

Several cryptocurrency analysts and aficionados are still positive about Solana despite the recent price drop, thinking the cryptocurrency is well-positioned to continue rising and hit new highs. An optimistic view for Solana is supported, among other things, by:

Some technical experts believe that Solanas price decline was a normal correction following a parabolic surge. Given that Solanas price is above its 50-day and 200-day moving averages, which are regarded as support levels, they contend that the market is still in an uptrend. Additionally, they note that the price of Solana is developing a bullish flag pattern, a continuation pattern that suggests a possible upside breakthrough. They forecast that shortly, Solanas price may rise and aim for the US$70-US$80 region.

Some fundamental experts believe that Solanas recent price decline was a transitory event that has no bearing on the companys future worth or prospects. Because of its distinctive and cutting-edge technology, sizable and expanding ecosystem, devoted and encouraging community, and high demand and acceptance, they contend that Solanas foundations are still robust and sound. Additionally, they draw attention to the several forthcoming events and advancements for Solana, including the Solana Breakpoint conference, the Solana Season Hackathon, the Solana Ignition awards program, and the introduction of new DApps and protocols, all of which have the potential to increase the platforms visibility and uptake.

Some mood analysts claim that panic and terror, not reason and reasoning, were the psychological causes of Solanas price collapse. Because there is a lot of social media buzz and engagement, a large number of active addresses and transactions, a low number of short positions and liquidations, and a high number of active addresses, they contend that Solanas attitude is still upbeat and hopeful. They add that when the market steadies and the network gets back to business as usual, Solanas mood should also become better and recover.

Finally, the sharp decline in Solanas price has prompted discussions among experts and cryptocurrency fans over whether or not the platforms smart contract boom is coming to an end. Given the variety of elements and circumstances that might have an immediate or long-term impact on Solanas price, the answer is neither precise nor unambiguous. But according to technical, fundamental, and sentiment research, Solanas price drop appears to have been a brief and healthy correction rather than a catastrophic and long-lasting collapse. Consequently, Solanas bull market is still active and may continue to rise, setting new records in the process.

Read more:
Solana Price Plunge Sparks Debates: Is the Bull Run Over? - Analytics Insight