- Community is bearish on Solana and Ethereum, but experts are still very bullish on SOL.
Crypto markets are still correcting, with most altcoins currently in the red.
As a seasoned crypto investor with a few battle scars from market corrections and altseason rallies, I’ve learned to keep an open mind and not let fear or greed dictate my investment decisions.
The crypto market continues to experience significant declines, with alternative coins being particularly affected.
As a crypto investor, I’m observing that most altcoins within the top 25 by market capitalization are displaying negative price movements at present. This slight daily decrease has me questioning the potential for an impending bearish storm or if we’re still in the midst of an altseason. It’s essential to keep a close eye on market trends and news, as well as the specific projects’ development progress and community sentiment, to make informed decisions.
Solana and Ethereum inspire bearish sentiments
As a crypto investor, I’ve noticed that two alternative coins have been particularly noteworthy in this market turbulence. These coins have appeared to jive with the bears, with their prices dipping below crucial support levels of $2,995 for one and $145 for another.
At the time of writing, Ethereum [ETH] was worth $2,968 and Solana [SOL] was at $141.
Data from CoinGecko says that the community is mostly bearish on both tokens right now.
Two days ago, according to Glassnode’s latest analysis, Ethereum’s performance has been underperforming compared to Bitcoin [BTC], which was previously reversed just a month before.
This is a stark reversal from its previous position, where it had shown dominance over Bitcoin.
As a market analyst, I’ve observed a significant decline in Ethereum’s price. The most pronounced dip reached approximately 44%, marking a stark contrast to Bitcoin’s maximum drawdown of around 21% over the same cycle.
This highlights Ethereum’s struggles and underperformance relative to Bitcoin.
For Ethereum short-term investors, the average purchase price, or cost basis, is nearly matched by the current market price, indicating a narrow gap between the two.
According to Glassnode, a slight market downturn could lead to a panicked selling response due to the current delicate state of the market.
A silver lining
Even though the forecast looks bleak, there’s still a glimmer of optimism. For example, Solana has managed to bounce back from what could have been its final significant decline in this market trend.
As a crypto analyst, I’ve closely observed Solana’s price action and based on my analysis, I believe that holding the $120 mark is crucial for its price stability.
He anticipates a surge in price, as per his predictions, reaching a peak of $320 at some point this year.
Additionally, there are signs that Solana could surpass Ethereum in transaction fees in the near future.
Dan Smith, a seasoned researcher at Blockworks, posited that Solana might overtake Ethereum in transaction fees and seize Maximal Extractable Value (MEV) as soon as this month. In simpler terms, Dan believes that Solana could outperform Ethereum when it comes to transaction costs and potentially reap more profits from complex trades before others do, starting this month.
As a crypto investor, I understand that MEV, or Minimum Exchange Value, signifies the greatest potential profit I can reap from executing trades on a decentralized exchange (DEX) before other market participants. This profit arises primarily from exploiting price differences, also known as arbitrage opportunities, between different pools or markets within the DEX ecosystem.
On the 7th of May, I noticed that Solana’s total market capitalization was approaching Ethereum’s, with a value of around $2.8 million for Solana compared to Ethereum’s $3.1 million. Notably, influential figures like Arthur Hayes continue to express optimism about the potential of Solana (SOL).
It’s intriguing to note that there’s a strong sense of optimism within the community regarding the wider altcoin sector, particularly AI-focused tokens such as Fetch.ai [FET].
Every day, there are newcomers jumping on board with meme coins such as PEPE and BONK. This influx of investors and traders indicates a strong belief that these coins will experience significant price growth by 2024.
So, yes, the bears might have managed to snatch control. But it is likely to be temporary.
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2024-05-10 01:43