Solana
Do Ethereum and Solana threaten the stability of the cryptocurrency market?
- The community is bearish on Solana and Ethereum, but experts are still very bullish on SOL.
- Crypto markets continue to correct, with most altcoins currently in the red.
The crypto market is still reeling from a solid case of corrections, and altcoins are experiencing it worse than anything.
At press time, almost all altcoins in the top 25 are in the red, having seen a slight decline on the daily charts. Is there a bearish storm on the horizon? Or are we still up for a new season?
Solana and Ethereum inspire bearish sentiments
Two top altcoins stood out among the crowd, seemingly dancing with the bears. Both coins fell from the critical support levels of $2,995 and $145.
At the time of writing, Ethereum [ETH] was worth $2,968 and Solana [SOL] was $141.
Data from CoinGecko says the community is currently mostly bearish on both tokens.
Just two days ago, Glassnode sharing that Ethereum’s performance is much lower than Bitcoin [BTC]while the opposite was the case only a month earlier.
This is a sharp reversal from its previous position, where it showed dominance over Bitcoin.
Ethereum’s price decline has been massive, with its largest drop reaching 44% over the cycle, more than double Bitcoin’s 21%.
This highlights Ethereum’s struggles and underperformance compared to Bitcoin.
The short-term holder cost basis for Ethereum, which generally offers support, shows that current prices are hovering very close to the cost basis of recent buyers.
Glassnode warns that this situation has created a precarious scenario in which any further market decline could trigger panic selling.
Source: Glassnode
A glimmer of hope
Despite the gloomy outlook, all hope is not lost. Solana, for example, appears to have overcome what could have been its last major correction of this market cycle.
According to a well-followed crypto analyst known as UndyingThe only support level Solana has to defend is $120.
He still expects a rally, with his projections suggesting a rise to a new high of $320 later this year.
Additionally, there are indicators that Solana could soon overtake Ethereum in terms of transaction fees.
Dan Smith, Senior Research Analyst at Blockworks, suggested that Solana could surpass Ethereum in transaction fees and capture maximum extractable value (MEV) as early as this month.
MEV represents the maximum profit that can be extracted from blockchain transactions through means such as arbitrage.
As of May 7, Solana’s total economic value was $2.8 million, close to Ethereum’s $3.1 million. Elite figures like Arthur Hayes are also still very bullish on SOL.
Interestingly though, the community seems very bullish on the broader altcoin market, particularly AI tokens like Recover.ai [FET].
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Parts same as Pepe [PEPE] And Bonk [BONK] We are still seeing new holders every day, suggesting that investors and traders still expect a bull run for 2024.
So, yes, the bears could have managed to take control. But it is likely to be temporary.