What happened
Volatility among mega-cap tokens hasn’t taken a breather today. In fact, major cryptocurrencies Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) have seen another day of declines. These tokens fell by 3.6% and 6.7%, respectively, over the past 24 hours, as of 9:30 a.m. ET.
Popular meme token Dogecoin (CRYPTO:DOGE) also saw significant selling pressure today, dropping 3.8% over the same time frame.
Total cumulative losses for these three tokens today approximate $55 billion thus far today.
For Bitcoin, deadly political protests in Kazakhstan, interestingly the world’s second-largest Bitcoin mining hub, impacted its mining network today.
Ethereum’s recent woes have continued, with losses for this top token once again outpacing Bitcoin’s, as investors look past the growth that smart contract-enabled blockchains like Ethereum provide in the decentralized finance world to move to perceived safe haven bets like Bitcoin.
Dogecoin has once again failed to see any momentum materialize, with speculators and traders sitting on their hands once again today.
So what
Overall, it appears the risk-off sentiment that has prevailed since the midweek release of the Federal Reserve meeting minutes continues to hamper sentiment among highly speculative asset classes. The prospect of rates rising sooner than expected, and more hawkish monetary policy taking hold, are broadly bearish for the volatile cryptocurrency sector.
Geopolitical concerns only exacerbate what appears to be a rotation out of risk assets right now. Investors looking for safety have generally sought out other more defensive asset classes, or are looking to relative safe havens like Bitcoin in the large-cap crypto world today. Of the top 5 largest crypto tokens by market capitalization (excluding stablecoins), Bitcoin is again the best performer.
Now what
Amid a flight to safety, investors are really left with few options in the crypto space. Yes, some small-cap tokens are surging today. There’s always opportunity in every market, and there will always be a few winners during every sell-off. However, the crypto market has been a sea of red to start the year for most tokens.
The question many investors have right now is: How long will this sell-off continue? Protracted declines among many top tokens have forced growth investors to look elsewhere to start the year. For now, market volatility is working against crypto investors. Given the lack of catalysts materializing right now, patience may indeed be a virtue for those looking to buy this dip.