There's plenty for investors to digest when it comes to the world of cryptocurrencies as we kick off 2024. Of course, the usual megacap tokens are going to be top of mind for most following this sector. However, for those intrigued by altcoins and smaller projects with higher upside, Hedera (HBAR -1.63%) is one project to keep an eye on right now.
As of 12:30 p.m. ET Tuesday, Hedera's 10.9% move has pushed this token to a fresh 52-week high, meaning Hedera is now within spitting distance of the key psychological $0.10 level. Now, that's still roughly 80% below this token's previous 2021 peak around $0.50, but it's certainly a directionally positive move.
Aside from the sectorwide momentum many cryptos are seeing today (due in large part to speculation that a spot Bitcoin ETF could be right around the corner), Hedera has some unique token-specific catalysts worth diving into. So, let's do just that.
What's driving Hedera higher today?
Hedera's enterprise-grade network, aimed at allowing developers to create high-performance decentralized applications (dApps), is really what drives investor interest in this project and its token. Accordingly, news that various dApps on the Hedera network are seeing significant growth appears to be spurring investment in this parent network.
One of Hedera's biggest decentralized applications is SaucerSwap, which has also been on a tear, making a new all-time high today. This comes as investors digest some strong total value locked (TVL) numbers for this Hedera-based decentralized exchange. Other decentralized applications built on Hedera are seeing similar TVL surges, such as liquid staking protocol Stader. Total value locked measures the amount of capital held within a specific application or ecosystem.
Additionally, many investors who follow Hedera may want to make note of a key partnership this project announced in December. Institutional-grade digital asset exchange Archax announced it would expand its support for staking Hedera's HBAR token, allowing institutional-grade investors to participate in securing the Hedera network. In general, this partnership validates Hedera's protocol as an institutional-friendly place to do business, something that may be of increased value as more institutional investors pile into this space (if a spot Bitcoin ETF is indeed approved).
Overall, Hedera's Hashgraph ecosystem TVL has also surged to a recent record high, signaling user growth and fundamentals are driving this token's valuation, at least for the time being.
Can this move be sustained?
We're only in the second calendar day of the year, so it's really hard to make any sort of assertions or predictions about this current rally in Hedera. That said, unlike many altcoins that appear to be purely riding Bitcoin's momentum higher today, Hedera is one project that's seeing some strong fundamental drivers for its rally. Thus, there's a case to be made that, so long as this ecosystem's TVL continues to rise, Hedera's momentum is more than simply hype-driven speculation.
Hedera's HBAR token is used within its ecosystem to power the smart contracts, transactions, and file storage decentralized applications need to function. Accordingly, the high correlation we're seeing with today's move in Hedera and the fundamental performance of many of its key applications makes sense. In my opinion, investors considering Hedera will want to closely monitor how applications like SaucerSwap and Stader continue to perform. That's because this surge in interest among traders and shakers on these dApps could be at least partially tied to the recent near-term sectorwide surge.
