Solana (SOL) is by far the worst-performing major cryptocurrency this week, after a shutdown further damaged sentiment.
The token slumped over 11% in the past seven days, and is trading around $37.22- close to its lowest level since August 2021.
SOL’s losses were triggered just after an error in block production caused developers to shut down the blockchain earlier this week.
The outage- far from Solana’s first this year, spurred a wave of backlash against the blockchain on social media. Several users threatened to abandon the project. Several others poked fun at the blockchain’s seeming lack of stability.
Solana faces string of outages this year
Solana’s five hour outage this week was far from its first this year. The blockchain had been taken offline earlier in May, and has faced outages intermittently through the year.
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Earlier in May, NFT minting bots clogged the blockchain’s transactions and crashed the network for seven hours.
But this week’s outage saw a sharper fall in the price than seen before. It may indicate that traders have lost faith in the blockchain, and are pulling out of SOL.
A weak trading environment has also done little to help SOL, and may have contributed to the token’s outsized fall this week.
Technical indicators do not favor SOL
With SOL breaking below a key support level of $38 this week, the token may be set to confirm a bearish pattern.
The token could be dumped to as low at $24- its next support level, if downside pressure continues. SOL appears to be trading an in descending triangle pattern, which could see the token lose over 40% in the coming weeks.
Solana is now about $2 billion away from being overtaken by Dogecoin as the ninth largest cryptocurrency. The recent launch of Chainlink price feeds, coupled with increased NFT minting on the blockchain, have done little to rescue SOL prices this year.
The token is down nearly 78% so far in 2022.
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