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There has been some criticism about Solana since it was established in March of 2020. Through a thread he created, Cyber Capital founder Justin Bons exposed the network’s recent “anomalies.” and how it violated decentralization in the sense of DeFi.
The native token of the network had a bullish pullback despite the controversy. Given the fundamental nature of some of the conflicts in which the Solana network finds itself embroiled, this comes as something of a surprise.
Is this price drop a precursor to future gains?
The Barrier To Confusion
At the moment, Bons is the most outspoken Solana critic, having started multiple threads concerning the most recent network developments.
Solana has had many outages this year, the most recent being on October 1, according to his latest thread.
This is a serious issue for the network, since it might undermine trust in the project and its token among investors.
An issue with a single validator on Solana’s blockchain led to the outage. As a result, the entire blockchain came to a halt, rendering all transactions suspended for a short time.
The management of Solana then utilized check-pointing to restart the entire cluster. In this way, they broke the decentralization of their ostensibly decentralized system.
Additionally, the developers are the target of the thread. According to the discussion, two network developers posed as 11 other network developers. These two developers then double-counted to increase the TVL figure.
Despite recent issues, SOL gained about 8% during the 3rd and 4th of October, before establishing a downtrend earlier today.
What Does This Imply About Solana?
As of this writing, SOL is trading at $33.35, up 4% in the last 24 hours.
Indicators also present a negative narrative. The bull and bear power indicator has maintained its downward trend, sending investors and traders strong sell indications. Similarly, stochastic RSI values follow this signal, indicating a strong sell sentiment among investors.
This could be a harbinger of worse to come for SOL. Today’s forming downtrend could be the beginning of the token’s free fall.
If things are to worsen significantly, the price should not fall below the 78.60 Fibonacci level, as any negative breach of this level will cause a further sell-off.
SOL total market cap at $11.8 billion on the daily chart | Featured image from Coinpedia, Chart: TradingView.com