Since the beginning of 2022, the pain trade has been a disconcerting sight in the cryptocurrency market. Over the past 24 hours, Bitcoin (BTC), and other altcoin prices have fallen. Analysts are now suggesting that there is a bear market.
Despite the concern of traders that another crypto winter might be beginning, these are times when investors have great opportunities to grab fundamentally sound cryptocurrency at a discounted price.
Crypto Fear & Greed Index. Source: Alternative.me
Here’s a look at some projects that have strong fundamentals and a proven use that could make them good candidates for accumulation in the current market correction.
Polygon (MATIC), Ethereum’s layer-two scaling solution, is currently at 50.76% below its record high of $2.92 set on Dec. 27, 2021.
MATIC/USDT 1-day chart. Source: TradingView
Polygon witnessed a huge amount of growth in 2021 due to its compatibility and low transaction costs. This made Polygon a popular destination for protocols and users who were looking for ways to stay on the Ethereum network without incurring high transaction fees.
Over time, total MATIC wallets. Source: Dune Analytics
It can host all kinds of decentralized applications, including AAVE lending protocols and Uniswap gaming or decentralized exchanges.
Polygon, a layer2 solution like Polygon, is likely to continue to enjoy increased engagement from users who are looking for lower-fee transactions.
Fantom (FTM), a layer-one crypto protocol, rose in popularity over 2021 because of its low fees and Ethereum Virtual Machine Compatibility (EVM). These features helped to attract new users and protocols onto the network.
FTM/USDT 1-day chart. Source: TradingView
Cointelegraph Markets Pro and TradingView data show that FTM’s price is down by 36.3% since December highs and currently trades at $2.15 as of the writing.
FTM’s bullish case is supported by the Fantom network’s continued increase in total value locked (TVL), despite market pullbacks. Data from Defi Lama shows that Fantom TVL currently stands at $12.07 billion.
Fantom’s total value Source: Defi Llama
Fantom trades at a substantial discount to SOL, despite having a TVL of $7.62billion, compared with other networks like Solana (SOL), which has a TVL that is $7.62billion).
TVL of #Fantom and #Solana are nearly the same now (10.67B vs 10.31B) Buy $FTM now like buy $SOL at 23$#fantomseason #solanawinter #fantomnews pic.twitter.com/eeUop6biZJ
Fantom News (@fantomnews), January 15, 2022
The current price of SOL is approximately $90. To have a matching market capital, FTM would need $18.10. This suggests that Fantom’s layer-one competitors are undervalued and that Fantom has the potential of closing that gap in 2022.
Polkadot, a multi-chain sharded protocol that facilitates cross-chain transfers of all data and asset types across multiple blockchain networks, is another token that could be potentially in a favorable accumulation zone.
TradingView and Cointelegraph Markets Pro data show that the price for DOT has fallen since November 2021. This could be due to the fact that DOT does not have a working bridge to Ethereum.
DOT/USDT 1-day chart. Source: TradingView
All that changed when Polkadot’s Moonbeam parachain (GLMR), was launched. It established the first cross-chain link for the Polkadot network. Moonbeam supports 700 ERC-20 tokens and has processed over 1,329,000 transactions as of Jan. 24.
In the coming months, other parachains will launch on Polkadot. DOT could see a rise of demand and token prices as more people look to join the Polkadot network.
Polkadot ecosystem. Source: PolkaProject
Investors and protocols have been competing for control over the platform’s governance, making Curve DAO token one of the most desired tokens.
CRV/USDT 1-day chart. Source: TradingView
According to TradingView data, the price of CRV is now trading at $2.76 after hitting an all-time high of $6.80 in January.
Despite the drop in CRV prices, ongoing ‘Curve Wars’ suggest that the demand for the token will rise once the current weakness of the market subsides. Decentralized finance projects are trying to gain governance power over the Curve ecosystem.
As of writing, 49% of the total circulating supply of cryptocurrency CRV has been locked away in veCRV. This voting token is used to implement the Curve protocol.
Curve: Curve’s percentage of CRV tokens. Source: Dune Analytics
Related: Is there room for crypto stablecoins in a Fed digital dollars?
Frax Share (FXS).
Another protocol that looks to play a larger role in the stablecoin sector is Frax Share (FXS), the first fractional-algorithmic stablecoin system in the crypto sector that began to gain traction near the end of 2021.
FXS/USDT 4-hour chart. Source: TradingView
FRAX, the protocol’s stablecoin, has become a favorite among DeFi users due to its decentralized nature and being able to compete with centralized projects such as USD Coin (USDC) or Tether (USDT).
The total volume of FRAX transactions has increased over the past six month, reaching an all-time high of $6.3 Billion as a result.
Monthly volume of FRAX. Source: Dune Analytics
FXS’s bullish momentum has been supported by an increasing total value locked. It increased by 30.53% in the last week and 86.9% in the month to reach a record $2.28 Billion on Jan. 24. Even though prices for almost every other asset in the crypto market fell, this record TVL climb is still impressive.
Frax Share total value Source: Defi Llama
FRAX is now being used across DeFi by users searching for more decentralized stablecoin alternatives. FXS could also see an increase in demand as stablecoin protocols become more important.
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Eileen Wilson –Technology and Energy
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