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Ethereum and Solana’s Impressive Recent Performance Revealed Across Multiple Metrics

Last Updated January 24, 2024 3:18 PM
Teuta Franjkovic
Last Updated January 24, 2024 3:18 PM

Key Takeaways

  • Ethereum has notably eclipsed Bitcoin in terms of market dynamics.
  • Solana has outperformed Ethereum and the broader altcoin market.
  • The altcoin market is in full swing, with the top 50 altcoins outperforming Bitcoin.

After a tumultuous 2022, Solana emerged as a crypto powerhouse in 2023, eclipsing even Ethereum’s performance. But despite its recent correction, signs are pointing towards a potential surge in SOL’s price.

Glassnode, a company specializing in on-chain analytics, has released an in-depth report  exploring these distinct trends and their implications in the broader context of the cryptocurrency market.

Solana Topping Ethereum in Daily Active Addresses

Solana’s user base is expanding at an impressive rate, surpassing even Ethereum in terms of daily active addresses.

According to Step Data Insight s, Solana is averaging over 400,000 daily active addresses, while Ethereum struggles to maintain even half of that number. This surge in user activity is a testament to Solana’s growing popularity and its potential to become a major force in the cryptocurrency landscape.

Indicative of Solana’s robust network health are its NFT metrics. Step Data Insights revealed in subsequent tweets that the network’s weekly NFT trading volume has experienced an impressive 77% surge, reaching $45 million.

ETH Surges 20% vs. BTC: Glassnode Report Highlights ETF Boom

The latest report from Glassnode’s “The Week Onchain,”  authored by Alice Kohn, casts a spotlight on the remarkable performances of Ethereum (ETH) and Solana (SOL) in the cryptocurrency market, particularly following the approval of Bitcoin exchange-traded funds (ETFs).

Ethereum has notably eclipsed Bitcoin in terms of market dynamics, achieving its strongest showing since late 2022. Kohn’s research points to a significant increase of over 20% in Ethereum’s value compared to Bitcoin, a trend that aligns with a renewed surge in the Ethereum derivatives market.

BTC Vs ETH perpetual open interest dominance
Credit: Glassnode

ETH Resurgence Fuels ETF Speculation, SOL Defies Odds 

The recent resurgence in Ethereum’s market performance, as highlighted in Glassnode’s report, suggests a potential shift in capital flows within the crypto market, sparking increased speculation about the possible introduction of a spot-based Ethereum ETF.

Despite these positive developments, Ethereum still lags behind the broader altcoin market, underperforming by 17%. In contrast, Solana (SOL) has followed a distinct trajectory. According to the same Glassnode report , Solana experienced remarkable price growth last year, overcoming challenges related to its association with the troubled FTX. This divergence in the paths of Ethereum and Solana illustrates the varied dynamics at play in the altcoin market.

In striking contrast to Ethereum, Solana (SOL) has shown remarkable performance, with the SOL/BTC ratio soaring by 290% since October 2023. This divergence is particularly noteworthy as Solana’s price did not undergo a significant revaluation following the Bitcoin ETF approvals, unlike Ethereum, according to Kohn.

Overall, the altcoin market has experienced substantial growth, witnessing a nearly 69% increase in market capitalization since the Blackrock Bitcoin ETF filing, highlighting a general uptrend in the altcoin sector, with Solana leading the way.

Altcoin Season in Full Swing as Top 50 Coins Outperform BTC

Recently, Altcoin Season Index signaled the start of an ‘altseason’.  This trend  continues with the top 50 altcoins surpassing Bitcoin’s performance over the last 90 days, as per the index.

Altcoin season
Credit: BlockchainCenter.net

Kohn pointed out  that this uptrend is largely fueled by tokens associated with Ethereum scaling solutions like Optimism, Arbitrum, and Polygon. Additionally, the early part of 2023 saw tokens in staking and GameFi sectors also exceeding Bitcoin’s performance, highlighting a diverse risk preference among investors in various altcoin categories.

Kohn’s latest research underscored the significant impact of recent market events:

“The approval of new Bitcoin ETFs has morphed into a classic ‘sell-the-news’ occurrence, stirring a volatile period in the crypto market.”

Glassnode’s analysis  reveals that Ethereum has come out on top in the short term, with investors achieving a multi-year peak in net realized profits. This trend indicates an increasing propensity among investors to participate in speculative activities, especially related to the potential launch of an ETH ETF and the rotation of capital.

Solana’s Explosive Price Growth: A Sign of Ethereum’s Challenger?

In addition to a significant increase in its total value locked (TVL), Solana has also witnessed a staggering 800% surge  in its price on a year-to-date basis. When compared to Ethereum, Solana has shown superior price growth; Ethereum’s year-to-date growth stands at just 94% . This contrast is also mirrored in the TVL charts, where Solana’s growth, although substantial, still falls behind Ethereum’s, which remains the world’s premier altcoin in terms of TVL. However, it’s important to note that relying solely on TVL as a metric can be misleading, as it may offer a false sense of accuracy and can be easily manipulated.

What truly sets Solana apart is its dynamic ecosystem, which is bustling with development activity on the blockchain and the creation of decentralized applications (dApps). It is often viewed as a faster, more cost-effective alternative to Ethereum, with an added advantage of superior user interface and experience. The extent of actual development and building on the blockchain is a key factor in increasing TVL, potentially propelling Solana to greater prominence in the crypto world.

 

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