Ethereum
Why Bitcoin, Ethereum and Dogecoin are taking a break today
As we begin a short week, investors in a range of speculative assets are seeing increasing selling pressure. Of course, there are many macroeconomic reasons for this apprehension. Some pretty big inflation numbers are expected later this week, which could impact everything from growth stocks to commodities to cryptocurrencies. These days it’s all about interest rates.
In the world of cryptography, Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) are among the megacap tokens that are seeing a decline today. Over the past 24 hours, these top three tokens are down 3.8%, 3.5%, and 4%, respectively, as of 2:30 p.m. ET.
Let’s take a look at what’s driving today’s price action in these top tokens.
Enthusiasm for key enablers fades
Investors in these three mega-cap tokens have certainly seen a strong run over the past few weeks, and indeed since the start of the year. Bitcoin started the party with the approval of a dozen spot exchange-traded fund (ETF) products, sparking significant demand for its token. Combined with a halving event, which saw the amount of newly issued Bitcoin cut in half, this created a supply and demand dynamic that was popular with investors.
Ethereum has recently seen similar catalysts take hold, with the Securities and Exchange Commission (SEC) also approving Ethereum spot ETFs last week. Additionally, previous upgrades have allowed Ethereum to become less inflationary and, depending on the day, deflationary based on metrics of token consumption versus transaction volumes.
As a more speculative asset, Dogecoin has increased market momentum. But with these catalysts now seemingly in the rearview mirror (it’s truly amazing how quickly the market adjusts to news, especially in this area), some investors may look to sell this news and wait patiently for another catalyst installs. A similar “sell the news“The effect took place immediately after the early approval of spot Bitcoin ETFs earlier this year.
Until the next catalyst sets in, investors seem to be waiting for the next reason to bet big on this sector (and these three default tokens).
A pause in the recovery, or a reversal?
Now the question is whether this recent decline is a sign of another decline to come, or whether it is simply a period of consolidation before the next rise. Earlier this month, a speculative wave hit the crypto sector, sending everything from meme tokens like Dogecoin to large-cap cryptos like Bitcoin and Ethereum soaring. But since then, it seems like the broader crypto market is waiting for the next catalyst on the horizon.
The story continues
There is certainly a huge amount of innovation and technological movement happening beneath the surface in the crypto space. I wouldn’t be surprised to see headlines about any of these three tokens that have the ability to drive the market higher, with all three benefiting from positive news. I just don’t know what the catalyst will be, or when we can expect positive momentum to be re-established. For now, I am happily watching this price development from the sidelines.
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Chris MacDonald has positions in Ethereum. The Motley Fool posts and recommends Bitcoin and Ethereum. The Mad Motley has a disclosure policy.
Why Bitcoin, Ethereum and Dogecoin are taking a break today was originally published by The Motley Fool