Early on Monday, Solana (SOL) is extending its downslide and trending lower despite a host of strong fundamentals which reveal rising interest and adoption of its cryptocurrency among investors and users. At the time of writing, SOL/USD is trading around $167.73, down by over 6% in the past one week.

One of the biggest reasons for the weak price action is the overall market sentiment which continues to remain firmly in bear territory. With market leader Bitcoin dropping below the key $50,000 mark, there has been a wide sell-off across the board, dragging down the price of Solana and most other cryptocurrencies in the market lately.

Did a DDoS Attack Cause an Outage in Solana’s Network?

The SOL token felt additional downside pressure over the weekend over news of a possible network outage on Friday. The high speed blockchain Solana suffered network congestion on account of Raydium’s latest AcceleRaytor IDO. While it did not take down the network, it did delay transaction processing, leading to frustration among several users who prefer Solana’s ecosystem for its high throughput against Ethereum’s network congestion issues.

On a positive not, however, the IDO for Metaverse project Realy which was responsible for causing the outage only goes to reveal the strong interest in projects developing on Solana’s ecosystem. The high demand for Realy’s IDO saw several tech-savvy investors deploy bots to process their transactions faster, causing issues to other users on the network. The last time this happened, bots brought down the blockchain for almost 18 hours during another IDO on Raydium – Grape Protocol.

While the latest DDoS attack has dented investor confidence in the SOL token somewhat, it could find some support from the launch of several exciting projects in the near term, especially in the NFT and Metaverse space. In addition, auditing firm Neodyme confirmed earlier this month how a bug in the token lending contract of the Solana Program Library (SPL) which put almost $2.6 billion worth oF TVL at risk across dApps has recently been fixed. The improved security as a result of resolving this vulnerability could potentially offset some of the decline in investor confidence caused due to the latest outage.

SOL/USD Technical Analysis

According to a report by Kraken, Solana could be getting ready for a strong rally as soon as early next year. The leading crypto exchange notes, “The fourth-ranked crypto asset appears to be in the early innings of its fourth wave of ‘price discovery.’ Accordingly, it appears in the early innings of a fourth wave of price discovery, potentially continuing the trend along the wedge pattern.”

On the H4 chart of SOL/USD, moving averages are exhibiting a strong bearish bias. However, leading technical indicators MACD and momentum suggest some buying interest in the market as well.

Solana’s price is sitting under the pivot point at $179.53 but holding above the immediate support at $154.73. We need to see a significant build-up in buying pressure to see SOL bounce back past the pivot point. However, with the bearish mood, it’s more likely that we could see some rangebound trading in the near-term between these two levels.