Altcoins
Why Altcoins Got Crushed on Monday
The cryptocurrency market is currently feeling tired and in need of good news.
Not for the first time, no news meant bad news, or at least a lack of interest, for a large number of altcoins on the cryptocurrency market on Monday. While these drops weren’t concerning, they still took value away from more than a few cryptocurrency portfolios.
Formerly high-flying altcoin The sandbox (SAND -0.94%), Come on (SUI 1.10%) e Axie Infinite (AXS -1.29%) are all down about 6% in late afternoon trading. More precipitous falls were recorded Stacks (STX 0.56%) e Creator (MKR -0.74%), down 7% and 10% respectively.
No news is disheartening news
It’s not like any of those cryptocurrencies were full of bad news. Rather, it’s the lack of particularly good items that inspires people to sell them off.
This isn’t all that surprising, really. After all, in the space of just a few months earlier this year, we had several powerful developments that helped increase the desire for such investments – and, in turn, drove up their prices.
January saw the approval and rapid introduction of the advert Bitcoin (Bitcoin 0.87%) exchange-traded funds, which in one fell swoop created a relatively quick and easy way for the crypto-curious to buy and hold the most popular coin. Speaking of Bitcoin, its latest halving also got investors excited, as history has shown that its price tended to increase sustainably after that event which occurred every few years.
Spot cryptocurrency ETFs are making their debut in Hong Kong on Tuesday. However, this isn’t driving excitement around digital money… at least, not yet.
Meanwhile, both the global and domestic economies appeared to be increasingly fertile fields in which to plant the seeds of cryptocurrency investments. Some key data seemed to indicate that inflation was starting to decline, and when inflation declines, interest rates tend to fall. Lower rates mean a greater appetite for risky assets – hello, cryptocurrencies! – therefore greater demand for your favorite coin or token.
Since, inflation has proven to be a more stubborn beast to tame, while more than a few profit-takers have taken profits in the wake of spot Bitcoin ETFs and excitement over the 2024 halving (which occurred earlier this month). As usual, Bitcoin’s trajectory mirrors that of a number of altcoins. By late Monday afternoon, its price had fallen to just over $63,000. Less than a week ago it was approaching $67,000.
The situation is better than some think
It’s not easy being an altcoin. Not only do they follow the whims of the broader macroeconomics (not to mention geopolitical developments), but they rarely escape Bitcoin’s orbit.
Crypto bulls, however, should not lose hope. There has been more positive than negative macroeconomic news lately. Furthermore, on the geopolitical front, the situation appears to be improving – albeit incrementally – in both the war in Ukraine and the Middle East. This seems like a “hang in there and stay positive” moment for believers in cryptocurrency.
Eric Volkmann has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin. The Motley Fool recommends Maker. The Motley Fool has a disclosure policy.