- Solana network activity has increased consistently with the rise of NFT popularity.
- NFT minting and heavy bot activity on the Solana blockchain resulted in an outage on the Ethereum-killer’s blockchain.
- Cryptocurrencies like Ethereum and Solana have crumbled under rising NFT activity and selling pressure.
Altcoins in the crypto ecosystem are being hit by a bloodbath amidst fears of Fed interest rate hikes. However, activity in NFTs has increased on blockchains like Ethereum and Solana. Massive activity on the blockchain has negatively impacted Solana and Ethereum price.
NFTs put Solana and Ethereum price under stress
The Solana blockchain recently recovered from a seven-hour outage resulting from the significant rush of bots minting NFTs on the SOL blockchain. NFT minting programs on blockchains like Ethereum and Solana have increased the transaction activity, resulting in congestion.
The mainnet fell out of consensus on the Solana network and crashed, and validator nodes collapsed under the volume of transactions involved in NFT minting for Candy Machine. On the Ethereum network, rising activity and congestion result in higher gas fees which made the blockchain network less lucrative for investors and traders.
Proponents argue that nobody would use the SOL network if Solana doesn’t have consistent uptime. The unique proposition of SOL is its consistent uptime, high transaction speed and low cost.
Analysts have criticized the lack of activity on the Solana network when NFT minting stops. This is considered a sign of bearish sentiment among users and the lack of utility of SOL.
One thing that's very telling about the people that invest in @solana( $SOL), is the lack of price movement after the network stops minting blocks.
— big pey (@bigpeyYT) May 2, 2022
Blockchain is a critical infrastructure for value management in our society. It can't go down.#Cardano is built to last.
Analysts believe Solana price could crumble under the rising selling pressure on SOL. @CryptoCapo_, a pseudonymous analyst and trader, believes Solana price could plummet further before the Ethereum-killer begins its trend reversal.
$SOL pic.twitter.com/FuLK3Usd0a
— il Capo Of Crypto (@CryptoCapo_) May 2, 2022
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
![Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Coins/Ripple/Ripple_Coin_31_02_XtraSmall.jpg)
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
![Bitcoin price falls amidst German government transfers, miners activity](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bit-coin-symbol-flag-3d-illustration-59931110_XtraSmall.jpg)
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
![Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/Bitcoin_2_XtraSmall.jpg)
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
![Three reasons why altcoins could shake off losses this week](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptos_XtraSmall.jpg)
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
![Bitcoin: BTC price correction could end in July, according to seasonal data](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoin_5_XtraSmall.jpg)
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.