Solana Price Rebounds as Founder Dispels Misconceptions on Network Capacity (2024)

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.

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.

Wrong assumption!

Solana blocks aren’t full. People are willing to pay high fees to be first to access specific state. Adding additional capacity, with L2s or ZKPs, will not result in lower fees for those users.

People want to launch L2s so they can make a profit providing… https://t.co/3Ex8FCcK2I pic.twitter.com/VsThgpcK87

— toly 🇺🇸 | compressed (@aeyakovenko) August 17, 2024

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

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.

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.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.