Solana (SOL) has experienced a remarkable increase of 95% in December, surpassing its top competitor in the layer-one blockchain token space, Ether (ETH), which only rose by 9.5% during the same period. SOL’s market dominance can be attributed to several factors this month. However, there are other major tokens that have outperformed Solana as the year comes to a close. Let’s explore three of these tokens in more detail.
Avalanche (AVAX), the tenth-largest cryptocurrency by market capitalization, has outperformed Solana in December with a rise of 104.75% month-to-date (MTD), reaching around $44. Interestingly, this rally in AVAX’s price followed the unlocking of 9.54 million AVAX tokens in late November, suggesting that the market absorbed the additional token supply without negatively impacting its value. This indicates a strong demand for AVAX, particularly in light of Ethereum’s increasing gas costs in December. For example, at the start of the month, Avalanche’s median gas cost was $0.051 per transaction, compared to Ethereum’s $4.66.
From a technical perspective, there is a visible divergence between AVAX’s rising prices and falling momentum. While AVAX’s price has formed higher highs, its daily relative strength index (RSI) has made lower highs throughout December, indicating a bearish divergence. This suggests that the cryptocurrency’s bull run may be approaching exhaustion. As a result, AVAX’s price could potentially drop towards the support confluence, which comprises its 0.383 Fib line near $33 and the 50-day exponential moving average (50-day EMA) near $31.50, either by New Year’s or in January 2024.
Near Protocol (NEAR) has surged over 125% MTD to $4.20. This increase coincided with a 350% rally in NEKO, a memecoin project associated with Near Protocol, which gained significant traction in December. Strategic partnerships, such as the one with Polygon Labs for developing zkWASM and with US-based IDS Inc., have further strengthened the Near Protocol project.
Technically, NEAR’s weekly RSI is currently overbought, indicating bullish exhaustion that could lead to a consolidation or correction. Therefore, NEAR’s price may correct towards its support level from June to October 2022, around $2.90, by early January 2024. If the price decisively closes below $2.90, bears may test the 50-week EMA near $2.18 as the next downside target.
Injective Protocol (INJ) has seen a rally of over 108% MTD to $38.30, partially driven by the broader boom in artificial intelligence (AI) tokens. Injective Protocol, as a layer-1 blockchain, integrates AI with decentralized finance (DeFi). The surge in the price of INJ can also be attributed to a trend among airdrop farmers who actively move between different blockchains to collect newly-issued token airdrops. Several projects built on Injective Protocol have confirmed plans for airdrops, creating anticipation and increasing interest in INJ tokens.
Similar to NEAR, INJ faces the risk of correction due to its excessively overbought status. The cryptocurrency’s three-day RSI reading has remained above 70 throughout December, while its price is approaching a multi-month ascending trendline resistance near $42, increasing the likelihood of a correction or consolidation. If there is a pullback from the ascending trendline resistance, traders may expect a decline towards INJ’s ascending trendline support near $18. This level, which is over 50% lower than the current price levels, has previously acted as resistance in November 2023 and September 2021.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.