Published on april 28, 2024, 12:29 am
Image source: Fox News
```json { "TLDR": "Solana's token SOL faced a 3.85% drop to $142 due to ongoing network outage issues and disappointing US economic news. Network problems persist despite some improvements, and the CEO of a Solana-based platform highlighted operational challenges. The dip in SOL's value was also influenced by slow US economic growth and high inflation rates, making interest rate cuts less likely. Overall, various factors like technical patterns, economic data, and market conditions contributed to SOL's price decline." } ```
SOL’s price faced a setback today, primarily due to ongoing network outage issues on the Solana blockchain and disappointing U.S. economic news. The native token of Solana, SOL, experienced a drop of approximately 3.85%, reaching $142 on April 25. This decline followed a correction that began the day before when SOL hit a local peak of about $160, amounting to an over 11% decrease since then.
The dip in SOL’s value can be attributed to several factors impacting its performance, including the acknowledgment by Solana developers that they are yet to resolve the network’s outage problems and an unsatisfactory U.S. economic report. Additionally, an underwhelming update on the U.S. economy added to investor uncertainty, affecting SOL’s market value.
Mert Mumtaz, CEO of Helius, a development platform based on Solana, refuted claims suggesting that the blockchain’s congestion issues had been fully addressed. Despite suggestions from data analytics firm SolanaFloor indicating improvement through reduced transaction confirmation times, Mumtaz emphasized that operational challenges persist within the network.
Solana has historically faced significant price corrections linked to issues with network stability, such as a notable instance resulting in a nearly 14% drop following a network failure. Today, like many other cryptocurrencies, SOL was impacted by sluggish U.S. economic growth and persistent inflationary pressures.
The U.S.’s GDP expanded by 1.6% in Q1 of 2024 but fell short of expectations while core inflation saw a surge to 3.7%. These developments make immediate interest rate cuts less probable; traders now anticipate lower Federal Reserve rate cuts in 2024 compared to previous forecasts at the beginning of the year.
High expectations for sustained high-interest rates have led to an increase in yields on U.S. Treasury notes, which reached a five-month peak of 4.73% as of April 24. Typically, higher yields reduce the attractiveness of riskier assets like stocks and cryptocurrencies – contributing to today’s downward pressure on SOL’s price.
Furthermore, SOL experienced a breakdown from its rising wedge pattern recently with trading volumes seeing an upturn – this pattern often signals potential further price declines equivalent to the wedge’s height.
In conclusion, today’s decline in SOL’s value is part of various factors affecting its performance including network challenges and macroeconomic conditions influencing the broader crypto market landscape.
Original article posted by Fox News
