Ethereum killers Solana (SOL), Terra (LUNA), and Avalanche (AVAX), back on track after brutal January—what to expect?

Ethereum, Ethereum killers Solana (SOL), Terra (LUNA), and  Avalanche (AVAX), back on track after brutal January—what to expect?
image from medium.com

Key Takeaways:

  • Solana (SOL), Terra (LUNA), and Avalanche (AVAX) lost north of 40% in the January.
  • The horde of Ethereum competitos recovering.
  • Should Ethereum (ETH) beware?

YEREVAN (CoinChapter.com) – Ethereum (ETH) is the largest DeFi network, with a market share of 59.6% and notoriously high transaction fees and high congestion. So-called “Ethereum killers,” opponent layer-1 protocols, rose to prominence in 2021, offering users several advantages over the alpha network.

However, many promising competitors, such as Solana (SOL), Terra (LUNA), and Avalanche (AVAX), fell behind in Jan 2022. As CoinChapter reported recently, they all dropped over 43% in a month, losing in price and total value locked (TVL) as well.

Solana, Terra, and Avalanche in recovery?

Three Ethereum killers mentioned above dove in January, following the ubiquitous trend on the market. However, the charts show they might be ready for a recovery. Additionally, all three digital assets painted somewhat similar bullish pictures on the charts, with their tokens enjoying a confluence of support in the previous week.

Also read: Top five crypto market winners and losers of the month.

Solana (SOL) recovering

Solana’s token traded at $105.6 in Tuesday’s Asian-Pacific session after almost halving its value in January. The digital asset held a significant resistance-turned-support line at $86.6 and gained 20% since Jan 28.

However, SOL arrived at a resistance trendline that capped its bullish attempts for the past month. If Solana pushes past the support, it could score an uptrend to at least $128.0.

Solana (SOL) daily chart. Source: SOLUSDT on TradingView.com
Solana (SOL) daily chart. Source: SOLUSDT on TradingView.com
Also read: Solana faces network instability woes as SOL paints a bearish pattern. 

Moreover, Coinbase, the largest crypto exchange in the US, listed two Solana-based tokens for the first time. FIDA and ORCA pair will start trading at 9 AM PT on Feb 1, according to Coinbase.

Terra (LUNA) gained over 15%

After the January freefall, it’s still early to talk about a full recovery to November’s all-time highs. However, Terra’s governance token LUNA gained 15% in the past two days, hinting at another support retest.

As of Feb 1, the digital asset traded at $53.3, with TVL at $13.7 billion. Notably, Terra’s TVL didn’t suffer as much as other DeFi platforms in the previous month. Additionally, its market share has been consistently growing since early 2021, from 0.46% in Mar 2021 to a solid 7% in Feb 2022.

Moreover, Terra upstaged Binance Smart Chain (BSC) by TVL and took silver to Ethereum’s gold after the latest daily uptrend.

DeFi protocols by TVL. Source: DeFiLlama.com
DeFi protocols by TVL. Source: DeFiLlama.com
Also read: Terra(LUNA) down 15% after Wonderland controversy reveal. 

Avalanche (AVAX) in a bullish setup

Another Ethereum killer Avalanche tumbled almost 40% in January, ranking #12 with a market cap of $17 billion. However, the digital asset has some fight left, as it has been maintaining a steady uptrend since Jan 22.

As with SOL and LUNA, it is too soon to assume a full, pre-December recovery. However, the token formed a setup that could fuel the bullish bias.

Avalanche (AVAX) in a bullish Falling Wedge. Source: AVAXUSDT on TradingView.com
Avalanche (AVAX) in a bullish Falling Wedge. Source: AVAXUSDT on TradingView.com
Also read: Crypto market faces threat from JJPMorgan'sstronger dollar prediction. 

The setup dubbed the ” Falling Wedge” is a bullish reversal pattern. If AVAX follows the formation, it could break the resistance trendline and make it to the support bar at $80.0 – $85.0.

What does this mean for Ethereum?

As mentioned, Ethereum remains dominant on the DeFi market, with a 59.6% share. However, as the “killers” could be on its heels soon, the alpha smart contract network should step up its ETH 2.0 game.

Ethereum TVL and DeFi market share. Source: DeFiLlama.com
Ethereum TVL and DeFi market share. Source: DeFiLlama.com

Ethereum has been promoting its 2.0 version for years now. The new Ethereum will allegedly solve the current high gas fee problem and relieve the network of congestion, offering scalability.

Moreover, experts at Coinbase believe that the ETH 2.0 is the only real competition to the existing network, as they conveyed in a recent report.

The majority of active app development across L1 networks still seems to be happening on the Ethereum blockchain with [TVL] of US$156 billion across 214 projects – which is almost double the TVL on the next 10 chains combined. This begs the question of how valuable L1 alternatives will ultimately be if ETH 2.0 is able to supplant the current model with a faster and cheaper option

read the report.
Also read: Ethereum recovers some lost ground, but ETH price struggles to move above $2.7k. 

Ethereum gained 14% in the previous week and didn’t seem to give up the fight against the “killers.” However, the users are the ultimate judges of DeFi, and as competition grows, Ethereum will have to step up its game to remain dominant.

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Ethereum, Ethereum killers Solana (SOL), Terra (LUNA), and  Avalanche (AVAX), back on track after brutal January—what to expect?

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