Solana Price Rebounds as Founder Dispels Misconceptions on Network Capacity

Sahil Mahadik
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Solana price

Highlights

  • Anatoly Yakovenko states that users pay high fees to prioritize access to specific states, not due to network congestion.
  • Solana price flag formation hints at a temporary pullback before the next leap.
  • The tightening of the Bollinger Bands indicates decreasing volatility and the possibility of an imminent breakout.

Solana price surged 2% to $145 amid a less volatile weekend. The bullish narrative was uplifted by Bitcoin’s attempts to regain the $ 60,000 psychological level. However, the SOL price developing a bullish continuation pattern flag could bolster a prolonged recovery by the end of August.

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Solana Price Holds Steady as Yakovenko Clarifies Fee Dynamics

Anatoly Yakovenko, co-founder of Solana, recently addressed the floating misconception about the SOL Network’s capacity and transaction. In his tweet, Yakovenko clarified that Solana’s blocks are not full, which some attributed to past network congestion.

Anatoly highlighted that amid the growing demand, people are willing to pay high fees to access specific states on the blockchain. This behavior is competitive as users prioritize speed and exclusivity, often for financial gain. Therefore, adding more capacity, whether through Layer 2 (L2) solutions or Zero-Knowledge Proofs (ZKPs), will not necessarily lower fees for those users seeking priority.

Amid the tweet, the Solana price showcased sustainability above the $140 level.

Yakovenko also argues that current fee dynamics are more intricately tied to user incentives than simple support and demand regarding block space. He added that profit potential typically drives the desire for an L2 scaling solution. L2 providers aim to capitalize on offering access to hotspots, areas of the network where demand for transactions is particularly high.

While this competitive landscape may result in more options for users, it does not inherently reduce costs on the main chain.

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SOL Price Forms Bull Flag Pattern

Solana Price prediction reveals a consolidation phase in the daily chart, extending from $110 to $200. With a wide range of 90 points, the consolidation phase has high volatility potential. 

In confluence with the prevailing uptrend, the consolidation range forms a bullish flag pattern in the SOL price chart. A bullish flag pattern is a trend continuation pattern that projects the possibility of a bullish trend extension. 

Currently, the flag pattern notices a bullish cycle in motion, and the SOL price trades at $145.36, with an intraday growth of 2.42%. 

If the bull cycle tests the overhead resistance trendline at $180, the Solana price shows an upside potential of 24%. Optimistically, a bullish breakout of the overhead resistance trendline will increase the possibility of the asset surpassing the $200 psychological resistance to hit the $250 mark. 

Regarding the technical indicators, the daily RSI line shows a bullish reversal from the oversold boundary line at 30%. Currently, it takes a lateral route slightly below the halfway line, but a double-bottom reversal projects the possibility of an uptrend continuation. 

In the case of Bollinger Bands, the SOL price is testing the 20-day SMA or the midline, with the upper and lower Bollinger Bands converging. Thus, the indicator shows a contraction phase potentially leading to a quick release of trend momentum on either side. 

Solana Price
SOL/USDT – 1d Chart

On the contrary to the bullish perspective, if the Solana price fails to uphold the $110 support level after a reversal from the $150 mark, the SOL price is likely to drop to $80.

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Frequently Asked Questions (FAQs)

1. What is the significance of the flag pattern in SOL's price action?

The flag pattern in Solana's price action is a bullish continuation pattern, suggesting that the current consolidation phase could lead to a prolonged recovery.

2. What did Anatoly Yakovenko clarify about Solana’s fee dynamics?

Anatoly Yakovenko clarified that Solana’s blocks are not full due to network congestion. Instead, users pay high fees to prioritize access to specific states on the blockchain, driven by competition and financial gain.

3. What are the technical indicators suggesting about SOL's future price movement? .

The Bollinger Bands indicate decreasing volatility, suggesting a potential breakout
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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.