Solana, Avalanche, Fantom Lead Ongoing Market Slump

The global crypto market cap has fallen 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 is showing no end in sight. 

The digital assets market resumed its months-long downfall today as sell-offs hit many of the space’s leading projects. The two biggest cryptocurrencies, Bitcoin and Ethereum, are down 2% and 6.8% on the day, with Bitcoin extending its record streak of eight weekly losses in a row. The top crypto asset dipped below the key psychological support line of $30,000 and is currently changing hands for around $29,160. The largest smart contract platform on the market, Ethereum, has plunged to $1,838 after two weeks of trading within the $1,900 to $2,150 range. It’s currently about 62.3% short of its all-time high. 

Several of the top Layer 1 blockchains as measured in user activity and total value locked in their DeFi ecosystems have posted some of the biggest losses in the market today. Solana, Avalanche, and Fantom, three Layer 1 projects sometimes described as Ethereum competitors, have suffered double-digit losses amid the downturn. 

Solana, arguably Ethereum’s strongest contender thanks to its high-speed, low-cost transactions, has seen its SOL token dip to the $44 mark after a 10.1% correction, now 83.1% short of its November 2021 high of $259. Solana and other similar Layer 1 networks gained pace in late 2021 as the “multi-chain thesis” became one of the industry’s dominant narratives alongside emerging trends like the Metaverse. Many pundits speculated that Ethereum would lose its dominance against “SOLUNAVAX,” a portmanteau referring to Solana, Terra, and Avalanche. However, Terra’s LUNA plummeted to zero earlier this month, while both Solana and Avalanche have suffered major drawdowns from their highs and bled against Ethereum. 

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

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

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

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