Solana, Cardano, and Avalanche Lead Crypto Market Losses With 5% Dips
Three of the crypto market’s most prominent Layer 1 blockchains Solana (SOL), Cardano (ADA), and Avalanche (AVAX) are at the forefront of the latest pullback in digital assets, each recording losses of over 5% in the past 24 hours. The correction comes as investors reassess risk profiles and capital rotations accelerate amid broader market fatigue.
While Bitcoin continues to consolidate just above the $82,000 mark, altcoins particularly those in the Layer 1 infrastructure category, have been hit harder. Sentiment has shifted from risk-on to risk-off, with traders increasingly wary of high valuations in chains that are showing signs of user slowdown, congestion, or low DeFi engagement.
Solana: High Throughput, High Frustration
Once championed as Ethereum’s most credible competitor, Solana is again in the spotlight for the wrong reasons. The network has faced fresh congestion issues recently, largely tied to a surge in meme coin launches and spam-heavy arbitrage bots. Despite Solana boasting one of the fastest blockchains in terms of throughput, its transaction finality and user experience have suffered.
Developers have acknowledged the issues and promised forthcoming upgrades to the validator client and priority fee system, but market participants appear increasingly impatient.
“Solana’s core tech is incredible, but the UX right now is borderline broken,” said crypto influencer Alex Lomas. “It’s not just a tech problem; it’s a trust problem.”
SOL, which was trading above $180 earlier this month, has now dipped below $160, triggering stop-loss cascades and risk-off rebalancing.
Cardano: Big Ideas, Slow Adoption
Cardano's network, long associated with academic rigour and formal verification, is struggling to translate that credibility into measurable adoption. Despite a passionate community and ongoing upgrades like Mithril and Hydra, on-chain metrics have been underwhelming.
TVL growth on Cardano-based DeFi apps has slowed, and wallet creation numbers are plateauing. While ADA maintains a strong presence in staking and governance, many developers appear to be flocking to faster, more liquid ecosystems.
“Cardano still feels like it’s in beta mode,” said Nadia Reeves of LayerMetrics. “It’s undervalued by some, overhyped by others but no one’s ignoring it.”
ADA fell from $0.64 to $0.59 over the past 24 hours, losing short-term support levels amid weakening market confidence.
Avalanche: Institutional Hype vs. Retail Reality
Avalanche, which burst onto the scene with rapid-fire subnets and enterprise partnerships, including AWS integration, has cooled considerably in recent months. Its GameFi and NFT efforts have shown promise, but mainstream adoption has yet to catch up.
AVAX has struggled to break through the $40 resistance line, and with overall DeFi participation in Avalanche tapering off, some investors are questioning whether the hype for 2022 is sustainable.
Nevertheless, the project continues to build. The Avalanche Foundation recently announced new incentives for developers, aiming to reignite ecosystem growth.
A Moment of Repricing or Opportunity?
Despite the correction, analysts stress the result may be less of a collapse and more of a healthy repricing.
“The market is reassessing Layer 1 valuations,” said Elena Munroe of CoinSphere Research. “As Bitcoin consolidates and altcoins get repriced, investors are rotating into projects with clearer fundamentals or yield.”
For long-term believers, these price drops may represent rare entry points into what many still consider foundational pieces of Web3 infrastructure. However, the fragile sentiment and persistent volatility will test patience and conviction.