Solana, Avalanche, Fantom Lead Ongoing Market Slump

The central theses

  • The global cryptocurrency market cap is down 4.1% today.
  • Avalanche, Fantom and Solana led the downturn with double-digit losses as Bitcoin extended its record streak of eight straight weekly losses.
  • The traditional stock market hasn’t fared much better this year, with the Nasdaq Composite Index posting a 27.62% year-to-date loss.

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The global crypto market cap is down 4.1% on the day. Several top Layer 1 blockchains are leading the decline with double-digit losses.

Top layer 1 blockchains slide

The crypto bear market shows no end in sight.

The digital asset market today continued its months-long decline as many of the industry’s leading projects were hit by sell-offs. The two largest cryptocurrencies, Bitcoin and Ethereum, are down 2% and 6.8% on the day, with Bitcoin extending its record streak of eight straight weekly losses. The top crypto asset fell below the key psychological support line of $30,000 and is currently changing hands at around $29,160. The largest smart contract platform on the market, Ethereum, has fallen to $1,838 after two weeks of trading within the $1,900-$2,150 range. It is currently about 62.3% below its all-time high.

Some of the top layer 1 blockchains judging by user activity and the total value locked into their DeFi ecosystems, some have seen some of the biggest losses in the market today. Solana, Avalanche, and Fantom, three Layer 1 projects sometimes dubbed Ethereum’s competitors, have suffered double-digit losses during the downturn.

Solana, arguably Ethereum’s closest competitor thanks to its fast and low-cost transactions, has seen its SOL token fall to the $44 mark after a 10.1% correction, now 83.1% below its November 2021 high of $259. Solana and other similar Layer 1 networks gained momentum in late 2021 as the “multi-chain thesis” became one of the dominant industry narratives alongside emerging trends like the metaverse. Many experts speculated that Ethereum would lose its dominance to “SOLUNAVAX”, a portmanteau related to Solana, Terra and Avalanche. However, Terra’s LUNA crashed to zero earlier this month, while both Solana and Avalanche have suffered huge losses from their highs and bleed against Ethereum.

Avalanche, currently the 15th largest cryptocurrency by market cap and the fourth largest network by total value locked in its DeFi ecosystem, has seen a daily loss of 14.2%. AVAX is currently trading around $24.60, down 83.1% from its peak of $144.

Fantom’s fall was one of the most brutal among Layer 1 networks in the ongoing bear cycle. At its October highs, Fantom’s FTM token traded for $3.46, placing it in the top 30 cryptocurrencies by market cap with $12.8 billion in liquidity tied up across its ecosystem of decentralized applications. After falling 11.1% today, FTM is changing hands for around $0.36, while Fantom has a total value locked of around $1.6 billion.

Notably, crypto isn’t the only asset class trading in a bear market in 2022. High-growth tech stocks have suffered more significant losses than some cryptocurrencies. The Nasdaq Composite Index, for example, is down 27.62% this year, while several tech stocks, including giants like Netflix, Peloton, and Roku, are down over 60%.

Disclosure: At the time of writing, the author of this article owned ETH and several other cryptocurrencies.

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