- The Layer 1 chain seems to be recovering.
- Ether, Solana and Avalanche are some of the best performing assets in the last 24 hours.
- As macroeconomic conditions remain uncertain, it may be premature to call the current price action the start of a recovery.
As the cryptocurrency market appears to be recovering, several Layer 1 chains are rebounding.
Level 1 Climb Higher
Layer 1 chains are leading the cryptocurrency market.
After falling to the lowest level in six months, several Tier 1 chains appear to be recovering.
Ether continues to set higher highs in the local time frame, reaching a price of $2,868 earlier this morning. The second largest cryptocurrency asset is now trading at its highest level since plunging more than 35% in mid-January. Ether is rapidly approaching the psychological price mark of $3,000, which could be the next big test for the asset.
ETH/USD K-line chart. Source: CoinGecko
Solana is another top performer, up 11% in the last 24 hours. The token has shown a strong recovery despite SOL falling 13.5% after a $322 million hack of one of the chain's main bridges. Other recent news, such as Solana Labs CEO Anatoly Yakovenko's proposal to introduce a fee-based marketplace on Solana, could be a bullish catalyst for the chain. Solana is currently trading at $105.55, up 29% from its January low of $81.41.
Not to be outdone, the ethereum-compatible Layer 1 chain Avalanche is also retesting higher levels. AVAX tokens are up a modest 8% on the day and appear to be making another attempt to stay above the current resistance level of $70. Avalanche has broken above that price point 3 times in the past two weeks, but has failed to hold on to its gains.
While the Layer 1 chain is enjoying positive price action today, the broader cryptocurrency market still appears to be influenced by macroeconomic conditions. Bitcoin and ethereum are at their highest levels of correlation with the U.S. stock market in over four years as concerns over the Fed's proposed rally loom.
Elsewhere, tensions between the U.S. and Russian governments over a possible Russian invasion of Ukraine have also put a damper on global markets, including cryptocurrencies. With these unknown variables still in play, it may be too early to decisively call today's price action the beginning of a recovery in the cryptocurrency market.
Disclosure: At the time of writing this feature, the author owns ETH, SOL and several other cryptocurrencies.