Altcoins have been making substantial gains in recent weeks, with Bitcoin leading the way. On November 15th, Bitcoin reached an intra-day high of $37,400. However, it is not just Bitcoin that is seeing positive price action. Altcoins like DYDX, Solana’s SOL, and Avalanche’s AVAX have all experienced double-digit gains and are chasing new year-to-date highs. This sustained bullish price action has led some analysts to declare the arrival of an altcoin season. At the time of writing, the total market capitalization of the altcoin market has reached its highest level in 2023, standing at $659.5 billion. In this article, we will explore the catalysts behind the growth of these top market performers and what sets them apart from others in the altcoin space.
DYDX is the token behind dYdX, a decentralized exchange that offers futures contracts on Ethereum Virtual Machine blockchain tokens, such as Ether (ETH). One significant milestone for DYDX was the launch of its layer-1 blockchain on October 27th. With the creation of its genesis block, the protocol update allowed for the on-chain distribution of all fees received to validators and stakers. This update has had a tremendous impact on the price of DYDX, surging over 110% in the past 30 days. Additionally, the dYdX platform has seen a substantial increase in user numbers, leading to a 77.5% rise in fees and revenues within the same period. If this trend continues, validators and stakers could potentially earn $105.5 million in fees on an annualized basis.
Solana’s SOL token has also shown impressive returns in the past 30 days, gaining over 166%. Despite reaching a 2023 high on November 10th, Solana’s price is still far from its all-time high of $259.96. The growth of Solana’s price can be attributed to an increase in users, primarily driven by the success of Jito, a liquidity staking platform built on the Solana blockchain. On November 10th, the daily active users on Solana reached a new high in 2023, hitting 200,000. Concurrently, Solana’s revenue has surpassed $1 million in the past 30 days, reflecting a 78.2% increase. These figures illustrate the growing popularity and utility of the Solana ecosystem, positioning it as a strong contender in the altcoin market.
Compared to Solana and dYdX, Avalanche is a relatively smaller layer-1 blockchain. Nevertheless, this has not stopped AVAX from making significant strides. In the past seven days alone, AVAX has experienced gains of over 59% and an impressive 118% growth in the past 30 days. While AVAX’s price is still more than 7 times below its all-time high, its performance highlights its potential for growth. Like Solana, Avalanche relies on validators who process transactions and receive tokens. Despite generating less revenue, AVAX has proven itself as a strong player in the altcoin market.
While these altcoins are performing well, it is important to note that Bitcoin continues to dominate the overall market, with a dominance rate above 50% since October 16th. However, when Bitcoin dominance decreases, funds typically flow into altcoins, signaling the beginning of an altseason. The recent gains of DYDX, SOL, and AVAX, along with other altcoins, suggest that investors are becoming more interested in alternative cryptocurrencies and are starting to diversify their portfolios.
The rise of altcoins like DYDX, Solana’s SOL, and Avalanche’s AVAX demonstrates the growing interest in the altcoin market. These projects have distinguished themselves with their innovative protocols, increase in user numbers, and attractive returns for validators and stakers. While Bitcoin remains the dominant force, the emergence of an altcoin season hints at the potential for further growth and adoption in the altcoin space. As the cryptocurrency market continues to evolve, it will be intriguing to see how these altcoins fare in the ever-changing landscape.