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As Ethereum regains lost ground in the crypto bear market, so too are some of its biggest competitors.
Solana’s native cryptocurrency SOL is up 11% in the past 24 hours and has spiked 36% in the past week, per CoinMarketCap data. Avalanche has also seen massive gains, with AVAX climbing 10% in the past day and pumping roughly 43% in the past week.
The native coins of other blockchains, like Algorand, Polkadot and Cardano, have seen more modest gains but are likewise climbing. Algorand’s ALGO is up about 7% today and 25% in the past week. Polkadot’s DOT is up roughly 8% in the past day and 23% in the past week, while Cardano’s ADA is up about 8% in 24 hours and 19% over the past seven-day period.
Why is this happening? It’s possible that bullish sentiment surrounding Ethereum—whose imminent shift to proof of stake through a long-awaited update known as “the merge” appears to be increasing demand for ETH—is generating optimistic sentiment more broadly across competing blockchains.
Ethereum itself has seen sudden gains recently, even amidst the dire crypto winter landscape, rising 50% in the past week and about 7% since Monday. The market movements followed a flurry of activity in recent weeks from Ethereum developers working on the merge, including the announcement of a tentative date of September 19 for the upgrade to be completed.
ETH was trading for around $1,200 prior to the timeline announcement, and is now currently trading above $1,500 for the first time since early June. Rebounding Bitcoin and Ethereum prices also appear to be having knock-on effects for crypto-exposed stocks, like Coinbase (COIN). COIN shares jumped 9% yesterday, despite the crypto exchange recently laying off 18% of its workforce.
While this might seem like light at the end of the tunnel, analysts are unsure whether this uptrend will continue. Marcus Sotiriou, Analyst at GlobalBlock, suspects the current rally is an indication that a local price bottom may be in—for now.
“Despite last week’s news regarding the latest inflation data, the crypto market has seen a relief rally since,” Sotiriou said in a statement Monday. “When the market starts reacting positively to negative news, this is a signal that a local bottom could be in for now, as fear may have caused the news to be priced in.”
But Sotiriou warns that all the crypto chaos in recent months—from events like Terra’s collapse and the bankruptcies of Celsius, Three Arrows, and Voyager Digital—means regulation is likely on the horizon.
“Stringent regulation could arrive soon,” Sotiriou warned. “The collapse of [centralized] lenders could be the reason that regulators have been looking for to implement draconian controls over cryptocurrency.”