One of the biggest headlines for cryptocurrency today is the loss of value for Solana, a rising star in alternative blockchain operations.
Yashu Gola at Cointelegraph reports that Solana’s value has dropped over 5% to around $96, as news drops of a currency loss through a platform called Wormhole that connects Solana to Ethereum.
Gola notes that a loss of $325 million in ‘wrapped Ethereum’ through Wormhole is having downward pressure on Solana’s blockchain itself.
First of all, what is ‘wrapped Ethereum?’
If you sift through a lot of the finer details on cryptocurrency tokens, you’ll see that wrapped Ethereum (wETH) is essentially a way to make tokens ERC-20 compliant.
In any case, the loss seems to have triggered big downsides for related blockchains.
Now, as Solana moves off of all-time highs at $112, analysts note an existing ‘bear flag’ that could cut Solana’s value in half, even after that initial drop.
“Solana security hole needs fixing asap?” tweeted Dominick Williams, the Founder, President and Chief Scientist of the DFINITY Foundation. “Seems their consensus proceeds with only 33% of the nodes … Hard math proofs show you need 66%+ for safety. No ifs no buts. Possibilities: 1) is insecure, 2) is centralized, or 3) they’ve broken Computer Science (unlikely).”
With a $50 price target, Solana is vulnerable to new doubt and new scrutiny.
“Solana price in the short term is consolidating hard after falling down from a huge cliff,” writes Sahana Vibhute at CoinPedia. “And hence the possibility of a retest towards the lower levels are pretty high. The price after the bearish breakout from the Falling wedge, the SOL price dipped to $80 support. The RSI went under 30 where it failed to bounce back within the downtrend. However, in the long term, the SOL price manifests a substantial uptrend.”
Keep an eye out for other big changes. And look for more of an explanation about Wormhole and what’s happening with that. Solana, to many, represents the move toward new defi systems that has potential, but is still really nascent.
