The SOL/USD pair had dumped to $145 across major markets, with some exchanges recording deals as low as $137
Solana is trading around the $160 price zone after recovering from a double-digit dump in early trades on Wednesday.
The downturn in SOL prices saw it plunge from intraday highs of $170 to $145, threatening more losses as sentiment around the cryptocurrency turned negative.
The breakdown had also seen bears seek to consolidate their hold below a key uptrend line, with the drawdown adding to the overall losses seen over the past few days. Bulls are, however, looking to hold above $150 as they target new momentum towards $200.
SOL/USD chart. Source: TradingView
Why did SOL price crash?
The cryptocurrency’s value against the US dollar had touched highs of $170 in late trading on 14 September, but the news of the degraded performance as the network got flooded with transactions appeared to invite sudden downward pressure from panicked traders.
At one time, the transaction load peaked at 400,000 TPS (transactions per second), with the network exhaustion leading to forking as efforts by engineers to resolve the incident proved unsuccessful. Later, after several hours of being offline, Solana announced a mainnet restart had successfully taken place.
The team expects the system to “recover over the next several hours, at which point full functionality should be restored,” noted an update posted on Twitter.
Despite this setback, Solana remains one of the top performers in the crypto market over the past several weeks.
The native cryptocurrency of the blockchain platform that some are calling an “Ethereum killer” is up over 200% in the past 30 days after it broke multiple milestones amid its parabolic rally to an all-time high of $213.47 on 9 September 2021.
At the time of writing, Solana has a market capitalisation of $48 billion and currently ranks seventh among the largest cryptocurrencies by market valuation.