NEW DREAM TEAM? SOLANA, LUNA TAKING ON BITCOIN AND ETHEREUM IN VOLUMES

As Bitcoin [BTC] and Ethereum [ETH] revel in distant dreams of their long-lost highs and struggle to break past their old resistance levels, is it possible that weary investors are looking towards more energetic alts instead? Here’s what the data said.

The start of an alt spring?

Santiment revealed that while Bitcoin and Ethereum volumes were sliding, those capitalizing on the loss included Terra [LUNA] and Solana [SOL].

In fact, a closer comparison reveals just how drastic this reversal in fortunes has been. Towards the beginning of 2022, Bitcoin and Ethereum dominated the market in terms of volume while Solana and Luna registered smaller spikes.

Fast forward three months, however, and we can clearly see that LUNA’s volume has surged high above that of Bitcoin, Ethereum, and even Solana.

As for Solana, the alt has been surpassing Bitcoin in terms of volume. Alas, it is yet to definitively overtake Ethereum.

However, SOL and LUNA investors are far from being over the moon as weighted sentiment for both assets was in the negative territory at press time.

This suggests that investors are well past the excitement of the “buy the dip” stage. Now ready with their newly acquired assets, most seem ready for a bull run.

Looking at the price action of both assets, at the time of this report, SOL was trading at $79.23, having depreciated by 2.23% in the last 24 hours while falling by 6.17% over the last seven days. Meanwhile, LUNA was changing hands at $91.07 after decreasing by 0.41% in a day and rallying by 11.86% in seven days.

While investors might take this as a sign to gather some alts for their portfolio, both coins come with their own baggage. For instance, Solana’s total value locked [TVL] share has been on a certain downtrend since the fall of 2021.

Meanwhile, Terra’s TVL is on the rise and with a 12.95% share, it is just behind Ethereum itself. And yet, analysts are concerned that LUNA could be due for a correction soon.

Furthermore, DeFi players are questioning the yield sustainability of Terra’s Anchor lending protocol.

Time to deal the cards

While Terra’s current trump card might be its formidable DeFi presence, Solana has an ace up its own sleeve. To be specific, this is Solana’s growing influence in the NFT space as it tries to outpace Ethereum.

In fact, on 13 March, Solana’s NFT standard Metaplex announced that it had hit a milestone of minting nine million NFTs. not been subtle. The report stated, “Compared to 2020, Ethereum dominance declined from 99% to 70%.” Looking at data from 2022 shows how this decline has only continued through the first three months of the year. As of 13 March, Ethereum’s TVL was only 54.73% of the total. Chains with rising dominance include Terra with a share of 12.48% and Avalanche with a share of 5.51%.

The report added, “Terra, Solana, and Avalanche became later competitors since September.”

That said, 2022’s stats did show that BSC and Solana have been falling in terms of TVL share.

Time to spread your wings?

Naturally, these changes in TVL dominance raise the question of whether or not Terra and Avalanche could be the new winners. TokenInsight reported that Avalanche had a “good summer wave” in 2021 and since then, Avalanche’s TVL has grown, dipped, and then recovered to hit 5.51%. Meanwhile, Terra’s LUNA has been the apple of many investors’ eyes since its 2022 rallies. The asset has also won over DeFi players thanks to its rising TVL. However, according to Token Insight, Terra’s Anchor lending protocol – now with a TVL of $12.6 billion – appears to be struggling with sustaining its high yield.

But despite these changes, it might not be time to throw Ethereum out the window just yet. The biggest alt by market cap and TVL has been seeing a month with average gas fees each day falling well below 100 gwei. With high fees often being a reason for investors to turn away from Ethereum, it remains to be seen whether this fall in prices will lead to a resurgence in Ethereum’s TVL dominance.

Phantom of the TVL

TokenInsight’s report found that Fantom is one of the chains enjoying “great success.” However, since the shock departures of Andre Cronje and Anton Nell – members of the Fantom Foundation – Fantom’s TVL has seen a sharp drop.

This goes to show that in spite of billions in TVL, DeFi projects can be fragile and highly susceptible to change.