Drop Off for Cryptocurrency Market- What Does It Mean?
Crypto prices are fluctuating wildly today with most coins trending low for now after an initial surge upward at the beginning of the week.
Quick overview
- Many crypto coins that surged earlier in the week have significantly declined by Thursday, raising concerns about market stability.
- XRP and Dogecoin have experienced notable drops of 8.47% and 6.87%, respectively, while Bitcoin remains relatively stable.
- The GENIUS Act has positively impacted the market by making stablecoins more accessible, benefiting major coins like Bitcoin and Ethereum.
- Investors are advised to be cautious with less frequently used coins, as they are experiencing greater volatility compared to top-ranking cryptocurrencies.
Live ETH/USD Chart
Many of the crypto coins that surged earlier in the week are way down on Thursday. Does this indicate that the market is retreating, and should investors worry?
Bitcoin (BTC) may not have moved much this week, but a number of high profile crypto coins have plummeted since their early week highs. XRP (XRP) has lost an astounding 8.47% since the previous day, and Dogecoin (DOGE) is down by 6.87% over the last 24 hours. Other notable coins that have fallen significantly in the last 24 hours include Tron, Cardano, Stellar, and Hedera.
ETH/USDDespite impressive gains early in the week off the back of the GENIUS Act for stablecoins being signed into law, many crypto tokens have dropped from last week’s levels. A number of them have wiped out their gains from the start of the week and are now lower than when the week began. Does this mean the market is headed into a state of retreat and will continue to trend downward?
Mixed Crypto Market Trends
As we look at the 24-hour and 7-day changes for a number of cryptocurrency tokens, it is obvious that they are not all experiencing the same issues. Bitcoin is down just 0.03% for the day, while Solana (SOL) has lost 5.45% in the same period. Over the last seven days, Bitcoin has actually gained a slight 0.39%.
Compare that to Ethereum (ETH) which rose much higher this week initially. That coin is up 5.81% for the week, although its last 24 hours have seen a drop of 0.81%. Bitcoin and Ethereum indicate that the strongest coins are weathering the massive upswings and downswings with some level of stability. The same cannot be said for all of the top-ranking coins, though.
Driving the market’s instability is the GENIUS Act, which makes stablecoins more widely available to the public. This creates a positive effect for the crypto market, since many investors buy stablecoins and hold them until they are ready to exchange them for more mobile coins like Ethereum and Bitcoin. The entire market will benefit from the Act, but the coins that are likely to experience the biggest benefits are those coins that people use the most, like ETH and BTC.
This is why the less frequently used coins are not as stable right now. They are fluctuating wildly between highs and lows and are retreating more on Thursday than the most frequently purchased coins. As helpful as the GENIUS Act is for the entire industry, it will be significantly less beneficial for smaller coins that people are less likely to buy.
We expect that BTC and ETH will retain much of their recent gains and may even climb today, even without any additional major developments in the crypto market. Investors should be wary of putting their money too heavily in the other coins, though, since they are fluctuating severely.
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