It’s been another incredible day in the world of cryptocurrencies. In aggregate, the crypto market has started the day in the green, as the total value of all digital currencies remains above the $1 trillion mark. This key psychological threshold was passed yesterday for the first time in more than a month.
Driving this sector higher was fantom (FTM -5.05%), the biggest winner in today’s market. It posted gains of 18.2% over the past 24 hours as of 9:30 am ET. NEAR Protocol (NEAR -0.52%) other Solana (SOL -8.32%) also saw impressive double-digit gains, surging 13% and 11.3%, respectively, over the same time frame.
This week’s rally among various top Layer 1 networks appears to be tied to newfound momentum around a date (finally) being set for Ethereum‘s (ETH -1.70%) long-anticipated merge. Layer 1 networks refer to foundational blockchain projects, upon which other decentralized applications can be built.
Interestingly, Fantom, NEAR, and Solana are each high-profile Layer 1 blockchains many view as Ethereum competitors. Accordingly, what benefits Ethereum doesn’t necessarily directly (or positively) impact these competing blockchain projects.
That said, many have pointed to the idea that liquidity tends to improve in the Layer 1 space following an Ethereum pump. That’s because traders will often divert their attention from Ethereum to other similar projects that may be next to see a flurry of activity. It’s an interesting take, and one that’s clearly paying off today.
Fantom, NEAR, and Solana are projects that have leveraged smart contract technology to enable much of the DeFi growth we’ve seen in the crypto world outside of Ethereum. Ethereum is still the leader by a wide margin in this space. But as far as alternatives go, these projects are obvious standouts for traders to target in a market with bullish sentiment and strong upward momentum.
Now, the question many crypto investors have is just how long this rally can continue. It’s important to keep today’s impressive rally in context. Indeed, it doesn’t matter which Layer 1 crypto project we’re talking about — they’re all down (big) from their peak. Accordingly, many more days of double-digit gains will be needed in order for new highs to be established.
That said, in this bear market, it’s one double-digit day higher at a time. This is a start. And whether it means the bottom is in or not is up for individual investors to discuss. Personally, I’m not so sure, but that’s what makes this whole investing game fun.
Chris MacDonald has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.