Solana ($SOL) Price Soars Despite 5-Hour Outage, Defying FUD: Is This a Local Bottom?

The high-performance smart contract platform Solana ($SOL) has suffered a major network outage earlier this month that last five hours and was its first outage since February 2023, when the network went down for several hours before being restored.

The price of its native token, however, surged more than 6% over the last 30 days and is up over 300% in the last six months. The network’s native token saw its price plunge to a low near the $93 mark before recovering, and is now trading around $104.

According to on-chain analytics firm Santiment, Solana has been one of the few altcoins outperforming leading cryptocurrency Bitcoin. The outage, the firm noted, has “concerned traders” and “ended up being a local bottom,” with the Fear, Uncertainty, and Doubt (FUD) from it “fueling this price rebound.”

📈 #Solana is one of the few #altcoins outperforming #Bitcoin this week, surging back above $102. In the past 36 hours, $SOL / $BTC is +4.5%. The outage that concerned traders Monday ended up being a local bottom, with the #FUD fueling this price rebound. https://t.co/lUC0DBS5B3 pic.twitter.com/1NTk5R4QBj

— Santiment (@santimentfeed) February 8, 2024

Earlier this month, investment products offering exposure to Solana saw inflows of $3 million over the past week, while cryptocurrency investment products, in general, saw nearly $500 million of outflows, with Bitcoin and Ethereum products leading.

According to CoinShares’ latest Digital Asset fund Flows Weekly report, cryptocurrency investment products saw $500 million of outflows partly over investors dropping Grayscale’s GBTC, which was recently converted into a spot Bitcoin ETF.

Outflows off of Grayscale’s funds totaled $2.23 billion, and led to the significant outflow figure, even as BlackRock’s spot Bitcoin ETF brought in $744 million and Fidelity’s fund brought in $643 million of inflows.

When it comes to altcoins, products offering exposure to Litecoin saw $200,000 in outflows, while those offering exposure to XRP and Cardano saw $400,000 in outflows each. Solana-focused investment products were among the few seeing inflows, behind products focusing on multiple cryptocurrencies, which saw $7.1 million in inflows.

Featured image via Unsplash.

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