Solana experienced "intermittent instability" for the second time in 12 days yesterday, causing the network to go offline for 18 hours. SOL dipped as a result of the incident but has quickly recovered.
Key Takeaways
- Solana crashed due to a denial of service yesterday.
- The network is now processing blocks, but some applications in the ecosystem have not yet recovered.
- SOL could target $207.50 as optimism returns.
The Solana Foundation reported a denial of service attack that took the blockchain down for 18 hours yesterday. Now that the network is back up, SOL appears to be making a recovery.
Solana Network Suffers Crash
The Solana network went offline for roughly 18 hours after experiencing “intermittent instability” Tuesday. The team behind the high-throughput blockchain reported that resource exhaustion had caused a denial of service.
It’s thought that the root cause of the issue was an IDO on the decentralized exchange Raydium. Bots tried to buy up tokens in the sale, flooding the network with 400,000 transactions per second.
Several queues in the validator code grew unbounded, and the lack of prioritization of network-critical messaging caused a chain split. The fork led to excessive memory consumption, leading validators to run out of memory and crash.
Solana Status, a Twitter (NYSE:TWTR) account run by the Solana Foundation, reported that the issue had been ongoing for 45 minutes at 12:38 UTC, while the restart was completed at 06:01 UTC. Although the network is now up and running, some dApps, block explorers, and supporting systems have not yet recovered.
SOL, Solana’s native token, took a 17% nosedive following the network outage. The seventh-largest cryptocurrency by market cap briefly dipped from a high of $171.50 to a low of $142.60.
SOL Prepares to Rise
Despite the sudden price crash, SOL appears ready to resume its uptrend. It recently broke out of a descending triangle that had been containing its price action since Sep. 8.
Slicing through the 38.2% Fibonacci retracement level at $170.64 could serve as another confirmation factor for a 28% upswing toward $207.50.
It is essential to pay close attention to the 23.6% Fibonacci retracement level at $159.92. Given the increasing volatility, market makers could be setting up a bull trap to liquidate unaware investors.
A decisive four-hour candlestick close below this support level could put a hold on the bullish thesis and result in a pullback to the recent swing low of $142.60 or transform into a steeper decline to $110.