Solana’s Rivalry with ETH: Who’s Outperforming Whom?

Solana currently holds the title of the fourth-largest cryptocurrency by market cap, but lags behind its main Layer 1 blockchain competitors in terms of price growth in December.

Solana is up 95% in December, but why are AVAX, INJ, and NEAR surging even more?

[image: Solana’s market dominance daily chart. Source: TradingView]

Solana (SOL) has been on fire in December, rising a staggering 95%. This performance easily outshines its top layer-one (L1) blockchain competitor, Ether (ETH), which has only managed a modest 9.5% increase in the same period. But wait, there’s more! Let’s dive deeper and explore three other major tokens that are even beating Solana as we approach the end of the year.

AVAX – The Avalanche of Gains 🏔️

Avalanche (AVAX), the tenth-largest cryptocurrency by market cap, has been the star of December, skyrocketing by a mind-blowing 104.75% month-to-date (MTD) to reach around $44. What’s fascinating is that this rally followed the unlocking of a significant supply of AVAX tokens in late November. Surprisingly, the market effortlessly absorbed this additional supply, indicating robust demand for AVAX.

This demand has been fueled by Ethereum’s rising gas costs, making Avalanche an attractive alternative. Back at the beginning of December, Avalanche’s median gas cost per transaction was a mere $0.051, while on Ethereum, it soared to $4.66. Talk about a cost-effective solution! Looks like AVAX is on a bullish run, right? Not so fast.

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[image: AVAX/USD daily price chart. Source: TradingView]

From a technical standpoint, there’s a divergence between AVAX’s rising prices and falling momentum. Despite reaching higher highs, the daily relative strength index (RSI) reveals lower highs throughout December, hinting at a possible bearish divergence. So, brace yourself for a potential drop in AVAX’s price towards key support levels by New Year’s or during January 2024.

NEAR Protocol – Beyond Expectations 🌌

Near Protocol (NEAR) has surged over 125% MTD, currently standing at $4.20. What’s even more intriguing is that NEKO, a memecoin project associated with the Near Protocol, witnessed a jaw-dropping 350% rally simultaneously. This extraordinary performance can be attributed to strategic partnerships, such as the ones with Polygon Labs and IDS Inc., which have boosted interest in the Near Protocol project.

[image: NEARUSD daily price chart. Source: TradingView]

However, don’t get too caught up in the hype. Technically speaking, NEAR’s weekly RSI is currently overbought, indicating a potential consolidation or correction in the near future. So, expect a possible correction towards the strong support level around $2.90 by early January 2024. Should NEAR breach this level decisively, the next downside target would be the 50-week exponential moving average (EMA) around $2.18.

Injective Protocol – Injecting AI into DeFi 🧪💉

Injective Protocol (INJ) has stolen the show with a staggering 108% MTD rally, bringing its price to $38.30. This impressive surge can be partly attributed to the broader AI token boom, as Injective Protocol integrates AI with decentralized finance (DeFi). There’s another intriguing factor behind this rally – the trend of airdrop farming.

[image: INJ/USDT YTD price performance versus other AI and big data tokens. Source: TradingView]

Avid airdrop farmers, individuals who actively scour different blockchains for newly-issued token airdrops, have been flocking to Injective Protocol. Several projects built on Injective Protocol have confirmed plans for airdrops, generating widespread anticipation and driving interest in INJ tokens.

Just like NEAR, INJ’s fate hangs in the balance. The cryptocurrency’s three-day RSI has been above 70 throughout December, indicating an excessively overbought condition. Moreover, the price is currently hovering near a multi-month ascending trendline resistance around $42, increasing the likelihood of a correction or consolidation ahead.

Projections suggest that a pullback from the ascending trendline resistance could drive INJ towards its ascending trendline support near $18. This level, which represents a more than 50% drop from the current price, has previously offered strong resistance in November 2023 and September 2021.

Future Outlook: Exciting Times Ahead? 🔮

While Solana has shown incredible strength, these three tokens have managed to outshine it in December. However, it’s essential to exercise caution when it comes to their future performance. Technical indicators and overbought conditions indicate the possibility of corrections or consolidations in the near term.

As we bid farewell to 2023, it will be fascinating to witness how these tokens navigate the ever-changing crypto landscape. Will they continue to amaze with their dreamlike performances, or will they succumb to the volatility? Only time will tell.

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Q&A

Q1: What are the reasons behind Solana’s exceptional performance in December?

Solana’s outstanding performance in December can be attributed to several factors, such as its scalability, fast transaction speeds, and low fees compared to other L1 blockchain tokens. Additionally, Solana’s ecosystem has seen significant growth and adoption, with various projects building on the network, further enhancing its market appeal.

Q2: Are there any risks associated with investing in AVAX, NEAR, and INJ?

Investing in any cryptocurrency carries inherent risks, including price volatility, regulatory uncertainties, and potential security vulnerabilities. AVAX, NEAR, and INJ are no exception. It’s crucial to conduct thorough research and carefully assess the fundamentals, technical indicators, and market conditions before investing. Diversification and consulting with a financial advisor can also help mitigate potential risks.

Q3: What are the potential long-term prospects for these tokens?

The long-term prospects for AVAX, NEAR, and INJ are promising, considering their strong performance and growing ecosystems. As blockchain technology continues to evolve and gain wider adoption, these tokens have the potential to carve out their respective niches in the market. However, it’s essential to stay updated on industry developments, monitor project updates, and assess market trends to gauge their future potential accurately.

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References:

1. Solana nears $100 as meme coin frenzy continues to drive the rally
2. Metis surges 50% as ecosystem projects eye $360M grant rewards
3. Bitcoin to retract to $36K before uptrend resumes, says QCP Capital
4. Bitcoin climbs near $44K as US stocks nurse biggest 3-month loss since 2020
5. Bitcoin’s third straight month of gains fuels altcoin comeback
6. NEKO
7. Injection Protocol consolidates gains as Everlot.GG and Eldorado merge

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