Solana (CRYPTO: SOL) is well-positioned against Ethereum (CRYPTO: ETH), according to the analysis of a prominent industry expert.
What Happened: According to Coin Bureau CEO and co-founder Nic, Solana is already outperforming Ethereum. Comparing the two blockchains, Solana started the year with fewer tokens but has since overtaken Ethereum since its ecosystem has seen 65% more token listings in the first half of the year.
Will Solana outperform Ethereum?
Here are 3 charts from the recent CMC H1 report that show how it is already doing so
This leads to more users and more active addresses on Solana, which has the most daily active addresses of any Layer-1 blockchain. Ethereum, in comparison, ranks fourth.
Solana is “the home of NFTs” and leads in unique wallets, buyers and transactions, while Bitcoin and Ethereum lead in terms of volume.
Nic points to the meme coin madness driving Solana usage and awareness. “The higher the returns, the more users they draw. It’s a degen cycle and Solana is top here,” Nic concludes and thinks, “Solana is no longer in Ethereum’s shadow.”
A ‘W chart pattern’ is formed when an asset’s price drops and then rises again before dropping once more and rising for a second time. A double bottom with a W shape signals bullish price momentum.
Another crypto trader recently confirmed a breakout for Solana, with yet another trader seeing Solana making a new all-time high later followed by a rally in ecosystem-related tokens.
Price Action: In the past 24 hours, SOL is up 3%, taking its weekly gains to 10.7%.
Pseudonymous crypto trader “Cold Blooded Shiller” raises the question of whether the market is already beginning to phase out certain altcoins in favor of stronger performers and Bitcoin (CRYPTO: BTC).
What Happened: Shiller points out that each crypto cycle sees coins that have a strong run but fail to make new all-time highs in subsequent cycles. During the current cycle, Bitcoin’s strength cannot be doubted, and there have been strong altcoin narratives and spectacular meme coin runs. However, Shiller notes an interesting separation among altcoins.
Is it possible we’re already seeing the phasing out of certain coins?
Each cycle we see coins that have a strong run, and then go on to never make a new ATH ever again.
During this cycle one thing that can not be doubted is the strength of $BTC. Then we have strong alt… pic.twitter.com/OGzoySztEt
Meme coins like Dogwifhat (CRYPTO: WIF), Pepe (CRYPTO: PEPE), and Floki Inu (CRYPTO: FLOKI) have seen gains in the range of 1,600% to 360% on year-to-date basis. Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) also reported gains of 57% and 125% respectively.
Using Polygon (CRYPTO: MATIC) as an example, the trader highlights how the token has undone its entire 2023/2024 run-up and is trading under a key support level, while BTC holds up well and other altcoins maintain their gains from the last seven months. Lido (CRYPTO: LDO) and ApeCoin (CRYPTO: APE) are the other two examples.
“It would make sense to simply ignore the alts that have failed to maintain any of their 7-month run-up, and we can easily determine strength from the % of gains kept,” the trader notes.
Why It Matters: Shiller ponders whether these underperforming altcoins are doomed to irrelevancy and if the market is already making decisions to phase out coins in preference for stronger performers or Bitcoin.
However, this process occurs between cycles, but this time market may be making these decisions during the current climate, Shiller suggests.
The trader’s advice points out that spotting good altcoins can be more challenging than anticipated. Traders may want to use a framework, such as this trader’s “technique to spot altcoins before a 100X surge.”
Pseudonymous cryptocurrency trader Vapor highlighted the growing prominence of meme coins in the digital asset space, asserting that they have become a force that cannot be ignored.
What Happened: Vapor took to X (formerly Twitter) to point out several advantages of meme coins over other popular crypto investment options. They are:
Simpler than on-chain Ponzi schemes.
More sustainable than pool2 farms.
More liquid than NFTs.
Safer than DeFi due to the absence of smart contract risks.
Meme coins also do not suffer from inflation or insider dumping through SAFTs (Simple Agreement for Future Tokens) like low float, high fully diluted value (FDV) new coins.
Vapor also suggests that meme coins provide better odds of winning compared to real-life lotteries or sports betting. As a result, they are absorbing liquidity and mindshare from various other investment venues in the cryptocurrency space.
Why It Matters: The crypto trader foresees that by the top of the current market cycle, at least three meme coins will surpass a market capitalization of $100 billion each. This forecast highlights the potential for meme coins to reach unprecedented levels of growth and adoption.
Looking back to a February 2024 Benzinga Twitter poll, readers voted on which meme coins they aremost bullish on.
GME Coin topped the list, followed by Shiba Inu (CRYPTO: SHIB), Dogecoin (CRYPTO: DOGE) and Pepe (CRYPTO: PEPE) took the third and fourth spot.
Crypto research firm 10x Research is worried about the possibility of a significant price correction for risk assets, including stocks and crypto, with inflation being the main trigger.
What Happened: In an April 15 newsletter titled “We Sold Everything Last Night,” 10x Research writes that the narrative for a sustainable crypto bull market can’t simply be that U.S. baby boomers are buying Bitcoin (CRYPTO: BTC) because BlackRock suddenly promoted an ETF.
They believe there must be a broader portfolio allocation diversification approach to include Bitcoin in portfolios.
10x Research emphasizes the importance of understanding that trading is an ongoing game with high-conviction opportunities. They believe the key is to keep analyzing the markets and finding those opportunities when the odds are in your favor.
Risks: Persistent Inflation, Interest Rate Cuts
The research highlights the unexpected and persistent inflation as a primary trigger for a potential price correction. With 10-year Treasury Yields surpassing 4.50% and the bond market now projecting less than three cuts, they believe risk assets may be at a crucial tipping point.
They also worry that the Federal Reserve might not cut interest rates at all this year. This could challenge the narrative that has driven most of the 2023/2024 Bitcoin rally (past year gains at 112.2%), which is based on expectations of interest rate cuts.
Bitcoin halving tends to be bullish, at least initially: Sixty days after the last three Halving events, Bitcoin was up 16%, but returns were skewed to the 2012 post-halving return when prices rallied 45% higher.
The data indicated that the pre-halving 60-day window was bullish and predicted a rally towards 68,000, which happened. In contrast, the post-halving data still shows a 16% surge, with the returns only picking up after 50 days.
Bearish Stance
Overall, 10x Research is bearish on risk assets, including stocks and cryptocurrencies. They have sold all their tech stocks and only hold a few high-conviction cryptocurrencies. They are lightly positioned and are expecting to buy again at better levels.
For the third time since their January launch, spot Bitcoin ETFs witnessed net outflows last week as Bitcoin (CRYPTO: BTC) prices declined 8% last week.
What Happened: BitMEX Research data, as reported by Blockworks, indicates an $83 million drop in assets in the 11-fund category from April 8 to April 12. This is a stark contrast to the net inflows of $485 million recorded the previous week.
Since their launch on January 11, spot Bitcoin ETFs have collectively attracted $12.5 billion in positive flows. However, the Grayscale Bitcoin Trust ETF (OTC:GBTC) has been the only U.S. BTC fund to consistently see outflows, with $767 million exiting last week.
Despite attempts by asset-gathering leaders such as BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) and the Fidelity Wise Origin Bitcoin Fund (BATS:FBTC) to counterbalance the GBTC’s negative net flows, they managed to attract only $487 million and $90 million, respectively.
The Bitcoin fund segment had only two weeks of net outflows before last week, losing $417 million in assets from Jan. 22 to Jan. 26 and $888 million from March 18 to March 22. The most significant net inflows in a week for the category peaked at $2.5 billion from March 11 to March 15.
Why It Matters: The recent ETF outflows coincide with a week where Bitcoin’s price fell 8% in the last week and by around 5% from Monday to Friday. Analysts suggest these outflows from U.S. spot Bitcoin ETFs indicate “increased profit-taking and investor caution,” following the strong uptrend over the past two quarters.
Coinglass data indicates a growth of 2.6% in its open interest to $33.1 billion alongside a 3% surge in Bitcoin prices in the past 24 hours.
Notably, Bitcoin liquidations in the past 24 hours have seen almost as many short liquidations ($118 million) as long liquidations ($126 million).
