As Bitcoin Reclaims $37K, Solana (SOL), Avalanche (AVAX) and dYdX produce double-digit gains.

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22 Jan 2024

In recent market developments, several altcoins, including Solana (SOL), Avalanche (AVAX), and dYdX, have exhibited notable strength alongside Bitcoin’s resurgence to $37,400 on November 15. This surge in altcoin performance has sparked discussions among analysts about the potential onset of an altcoin season, with the total market capitalization of the altcoin market reaching a 2023 high at $659.5 billion. This blog explores the key factors behind the impressive gains of SOL, AVAX, and dYdX during this period.

dYdX’s Fee Switch Sparks Growth:

The dYdX token, associated with the decentralized exchange dYdX, has experienced a remarkable surge, surging over 110% in the past 30 days. This growth can be attributed to the successful implementation of a layer-1 blockchain on October 27, with the creation of its genesis block utilizing native DYDX tokens. The protocol update, allowing on-chain distribution of fees to validators and stakers, has significantly contributed to the token’s positive momentum. Notably, dYdX’s platform has witnessed a surge in user numbers, with a 77.5% increase in fees and revenues, potentially amounting to an annualized $105.5 million for validators and stakers.
DYDX price. Source: TokenTerminal
DYDX fees and revenue. Source: TokenTerminal

Solana’s Impressive 30-Day Return:

Solana’s SOL token has demonstrated an impressive 166% gain in the past 30 days, reaching another 2023 high on November 10. The growth is fueled by increased user activity, primarily driven by Jito, the top-performing decentralized application on the Solana blockchain, offering a liquidity staking platform. Solana’s daily active users reached 200,000 on November 10, contributing to a 78.2% increase in revenue, surpassing $1 million in 30 days.
Solana price. Source: TokenTerminal
Solana daily active users and revenue. Source: TokenTerminal

Avalanche (AVAX) Gains Momentum:

Avalanche, a layer-1 blockchain akin to Solana, has also experienced substantial gains, reaching over 59% in the past seven days and an impressive 118% growth in the last 30 days. Despite generating less revenue compared to Solana and dYdX, AVAX’s strong performance is evident. Despite being more than 7x below its all-time high, AVAX’s growth signifies its potential in the current market conditions.
AVAX price. Source: TokenTerminal
dYdX, Solana and Avalanche fees. Source: TokenTerminal

Altseason Potential Amid Bitcoin Dominance:

While SOL, AVAX, and dYdX exhibit robust performance, Bitcoin continues to dominate the overall market, with a dominance rate above 50% since October 16. The relationship between Bitcoin dominance and altcoin performance suggests the possibility of an altseason when Bitcoin’s dominance decreases. Investors often reallocate funds from Bitcoin to altcoins during this period, signaling a potential shift in market dynamics.
Bitcoin dominance. Source: Coinglass

Conclusion:

The recent double-digit gains of SOL, AVAX, and dYdX highlight the dynamic nature of the cryptocurrency market. While specific catalysts such as protocol updates, increased user activity, and blockchain developments drive the growth of these altcoins, the broader market conditions, especially Bitcoin’s dominance, play a crucial role. As the cryptocurrency landscape continues to evolve, investors should remain vigilant and conduct thorough research before making investment decisions in this dynamic market.
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Written by Shantanu Gupta

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