Broad based market rout for nearly every alt coins in crypto such as Ether, Solana and Avalanche took the beating.
The impact of the collapse of Terra blockchain ecosystem knocked an already bearish market into wild contagion this month. While Terra’s operators had passed a revival plan to start a fresh new blockchain on Wednesday, investors are less than assured in terms of confidence.
A glitch in the process to make the Ethereum network less energy intensive added to the concern.
“Bearish sentiment remains the theme for cryptos,” said Edward Moya, senior market analyst at Oanda as reported by Bloomberg. He noted that Ethereum’s growing list of competitors could make the fallout from unexpected hitches to its update, known as the Merge, particularly intense.
Ether was down as much as 11% on Thursday before paring losses to around $1,850 which is far below the threshold of $2,000 which it needs to trade above meaningfully and soon – if bearish sentiment to ease.
Other tokens linked to protocols popular with decentralized finance projects like Avalanche, Solana and Polkadot were also slumping, down between 11% and 17% over the last 24 hours.
Demand for blockspace on the Ethereum network has reduced significantly in the wake of Terra’s collapse, which means that consequently, the network’s so-called gas fees are falling. With the exception of a few spikes during high-profile minting events like Yuga Labs’ Otherside land sale, Glassnode data show gas prices have been trending downward since December and recently reached multiyear lows.
“Even though it was just a single anecdotal day’s data, Solana’s NFT volume surpassing Ethereum is a significant blow to investor confidence that it will remain the go-to base layer protocol of the decentralized web,” added Mati Greenspan, founder of crypto research firm Quantum Economics as reported by Bloomberg.
“That said, the entire crypto market is down right now so we should be weary about making any long term conclusions from short term data.”
