What’s wrong
Two largest cryptocurrencies by market capitalization, Bitcoin (BTC -6.15% ). When Ethereum (ETH -7.51% ).Today, we have seen some significant sales pressures. These two tokens are trading slightly above their daily lows, but have fallen 3.8% and 4.6% respectively at 12:40 EST in the last 24 hours.
The downside of Bitcoin seems to be related to the increase in trading volume, as the active supply of Bitcoin surged to about 565,000 tokens. This increase in the number of Bitcoins being traded is the highest since the start of the pandemic, suggesting that more volatility may be on the horizon.
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In the case of Ethereum, investors hate to see the news that this token was stolen as the second bet network. Terra last week. The size of the Ethereum ecosystem is considered a defensive moat that underpins the high reputation of this token.
Ripple XRP (XRP -4.86% ). Tokens are also down, but slightly less than these two Jaguar notes, down only 0.5% at 12:40 EST in the last 24 hours. This outperformance continues XRP’s recent trend, with speculation that the proceedings with Ripple’s Securities and Exchange Commission (SEC) could end in April, resulting in higher-market returns. doing.
So what
The Bulls may argue that more Bitcoin is being traded and that the potential summary of Ripple’s proceedings with the SEC is a positive catalyst. That may certainly be the case. However, ongoing macro pressures appear to be influencing the investor’s decision-making process. These tokens will be interesting to watch in the coming days to see if today’s pricing behavior is just a breather or a signal that bearish momentum will continue to be a common theme in 2022. Probably.
There is once again concern for Ethereum about how isolated the ecosystem of this network is compared to its peers. Various blockchain networks have enhanced the staking game. This means that as more tokens are locked to a particular network, supply will drop and perhaps prices will rise in the long run. While the move to Ethereum’s Proof of Stake validation model is underway, stackers continue to be pushed to other tokens due to staking restrictions (the number of ETHs that need to bet on the beacon chain is very high).
So
Today, it is a volatile market and there is uncertainty that continues to hold an ugly head for investors. As a highly volatile sector, digital currencies have exacerbated what investors see in the stock market. Therefore, this asset class appears to remain reserved for investors who are implementing either aggressive risk tolerance thresholds or very strong risk management protocols.
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