Layer 1 Projects Rocked by Market Selloff

Key Takeaways

  • Several Layer 1 cash are down right this moment amidst a wider market selloff.
  • Measures of sentiment out there recommend that worry could also be peaking.
  • It is feasible that elements and circumstances on the planet at giant could also be contributing to the downward value momentum.

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Many widespread Layer 1 initiatives within the prime 100 are down right this moment amidst an total market selloff. While the trigger is unclear, doable elements embrace a brand new Covid variant, fears over Chinese debt obligations, and uncertainty relating to the Federal Reserve’s plans for bond purchases. 

Crypto Markets Shaken

Several Layer 1 protocols have suffered losses throughout a wider selloff that has shaken crypto markets over the weekend.

The massive losers of the week are Cosmos, Fantom, Elrond, and Harmony. At the time of writing, Cosmos’s ATOM was down 15% on the week, Fantom’s FTM was down 29%, Elrond’s was EGLD down 31%, and Harmony’s ONE was down 35%.

While many cash are down 15-30% on the week, the notable exception is Terra’s LUNA. LUNA is up round 19% on the week regardless of its 6.5% correction right this moment. Furthermore, much of the market appears to be bleeding towards ETH, which is at present holding above $4,000 regardless of an total drop of roughly 4% on the week. 

It isn’t just Layer 1 protocols which have suffered the previous few days. Even metaverse tokens like MANA and SAND, which have been performing fairly properly not too long ago, are every down roughly 27% over the previous week, and the full cryptocurrency market cap has fallen to $2.25 trillion from almost $3 trillion in November. The generally cited Fear and Greed Index locations current sentiment at an “Extreme Fear” stage of 16 (out of 100), dropping under final week’s score of 33. Last month, the indicator confirmed a grasping market at 71. 

While many could also be perplexed by the state of the present cycle, it seems that there are various doable non-cryptocurrency-specific causes for the worry out there. In current months, unfavorable crypto-specific catalysts, comparable to regulatory issues, have appeared notably pertinent; nevertheless, the present downtrend might have extra to do with different externalities originating from exterior of the crypto house itself. 

While causes for the selloff stay unsure, seemingly contenders may very well be worry surrounding the brand new Omicron Covid variant, in addition to renewed uncertainty surrounding China’s huge actual property developer Evergrande. There additionally seems to be uncertainty relating to the Federal Reserve’s timeline for tapering its bond purchases. 

Disclosure: At the time of writing, the creator of this piece held ETH, LUNA, and a number of other different cryptocurrencies. 

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