Solana and Avalanche See Price Boost Amid Bitcoin's Faltering Dominance
Summary:
On December 21, Solana (SOL) and Avalanche (AVAX) witnessed a price surge among large-cap altcoins even as Bitcoin's value hovered around the $43,400 mark. Bitcoin's inability to secure the $45,000 benchmark led to its market dominance dipping from 53.95% to 53.17%, with altcoin market dominance rising correspondingly. Amid speculation of possible interest rate cuts by the Federal Reserve and potential spot Bitcoin ETF approval in 2024, overall crypto asset sentiment remained buoyant. Growth factors for SOL and AVAX price included user experience improvements, new token launches, mobile accessibility, and increased use of decentralized applications (DApps).
The prices of Solana (SOL) and Avalanche (AVAX) have been given a boost among large-cap altcoins on Dec. 21 while Bitcoin's price continues to plateau at around the $43,400 mark. This positive trajectory of altcoins comes as Bitcoin was unable to hold the $45,000 mark, a key resistance point since its initial surge on Dec. 5. With $45,000 posing as a sturdy resistance level, Bitcoin's market dominance is slowly receding from 53.95% to 53.17%. Alongside that, as the graph below shows, altcoin market dominance is on a parallel upward trend. Bitcoin's share in the market versus altcoin, 1-day chart. Source: TradingView. Market players who leverage technical analysis usually interpret a decline in Bitcoin dominance and steady price movements or consolidation of BTC as potential indicators for altcoins' growth. Furthermore, the correlations between the U.S. Dollar Index (DXY) and BTC price often serve as a popular sentiment indicator among technical traders. Presently, while DXY has dropped by 1.56% this month, Bitcoin has managed to retain a 16.18% gain during the same period. Bitcoin price versus U.S. Dollar Index, 3-day chart. Source: TradingView. The recent turning of the tide for DXY is primarily sparked by the latest remarks of Federal Reserve Chairman Jerome Powell and pointers from the Federal Open Market Committee suggesting possible three interest rate slashes in 2024. With anticipation for a potential spot Bitcoin ETF approval in the first quarter of 2024 and the belief within market that the era of Federal interest rate hikes is finished, overall sentiment toward crypto assets hovers around the euphoric threshold. Related: Bitcoin analysts predict $48K BTC price before potential ETF sell-off event- Solana and Avalanche eye new peak prices in 2023. Marcel Pechman, Cointelegraph's market analyst, purports that SOL's price hinting at $100 is fueled by a mix of network-related and technical reasons. On Dec. 20, SOL outranked XRP by market cap, now holding the fourth spot among cryptocurrencies, discounting stablecoins. This rise can mostly be credited to the enhanced user experience on the Solana platform, particularly concerning token and nonfungible token (NFT) launches. Its focus on mobile accessibility as marketed by its mobile platform @solanamobile, is reeling in new users who prioritize user convenience over factors such as decentralization. This ease of use along with Solana's resilience in managing large-scale projects and offering low transaction costs make it a potent contender in the cryptocurrency arena, even against Ethereum which is currently grappling with these improvements. The recent upsurge in SOL's pricing is propelled partially by the excitement about airdrops, the listing of the newly-released SPL token JITO on major exchanges and its consequent triumph, hitting a market cap exceeding $300 million soon after its trade kick-off. Apart from these, support for SOL's recent hike comes from the proliferation of decentralized applications (DApps) on Solana's network. Top blockchain networks based on DApps volume in the last week. Source: DappRadar. The total value locked (TVL) in Solana has almost doubled in three weeks, escalating from $654 million to $1.28 billion. This rate of growth surpasses its rivals, along with a substantial increase in unique active addresses interacting with Solana’s DApps. Similar patterns are observable within the Avalanche ecosystem. A surge in DApp users, rewards provided by different DeFi protocols and the ongoing speculation of airdrops have caused influx of funds, an increase in daily active users and a rise in AVAX price. AVAX price versus daily active users of Avalanche, 1-year timeframe. Source: Token Terminal. This article does not provide investment advice or recommendations. Each investment and trading movement carries a certain level of risk, hence readers should undertake their own research before deciding.
Published At
12/22/2023 1:08:29 AM
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