Cryptocurrency Market Gives Back Most of Last Week’s Gain; XRP Plunges
The cryptocurrency market extended its slide on Tuesday, with XRP’s double-digit drop leading the decline as sellers regained the upper hand following weekend consolidation.
The combined value of all cryptocurrencies fell by another $10 billion on Tuesday to $207.5 billion, the lowest in five days. The selloff was accompanied by a slight pick-up in trading volumes with total market turnover reaching $14.2 billion.
XRP was by far the biggest decliner, falling 15.2% to $0.452. The third-largest cryptocurrency by market cap is down 34% from recent peak levels.
Ethereum also fell hard on Tuesday, shedding 9.1% to $212. EOS also declined 9.1% to $5.18. Meanwhile, bitcoin cash was off 5.5% at $441.
Compared with altcoins and tokens, bitcoin’s price action was more subdued. BTC declined 3% to $6,426 but saw its market share climb to 53.6%. Bitcoin’s dominance rate recently fell to its lowest in almost six weeks.
Struggling for Momentum
The Tuesday selloff was an extension of early-week volatility that saw coin values decline by more than $10 billion. Since peaking slightly above $230 billion last week, cryptoassets have lost $23 billion in combined value.
The sudden and sharp reversal wasn’t entirely unexpected. XRP faced extremely overbought conditions after prices more than tripled last week. Investors’ euphoria stemmed from a trio of announcements involving XRP’s parent company, Ripple Labs, which pointed to wider mainstream adoption of blockchain technology and cryptocurrency.
XRP’s massive gains fueled optimism that other comparable projects would soon follow suit. Stellar XLM, another high-profile blockchain project, surged last week amid news it had acquired Chain, a San Francisco-based startup. Stellar’s commercial arm and the newly acquired Chain formed a new company called Interstellar.
For all the positive developments underway in the blockchain arena, cryptocurrencies remain firmly entrenched in a long-term bear market. This is unlikely to change in the near future as capital flows into ICOs dry up and leading projects like Ethereum address their litany of issues.
As Hacked reported last month, the cryptocurrency market appears to be undergoing a paradigm shift as low-quality coins embark on a mass extinction event. Ethereum’s Vitalik Buterin once predicted that 90% of tokens listed on CoinMarketCap will go to zero. Presently, there are 1,993 projects listed on CoinMarketCap. Among them, 1,593 have a market cap higher than zero.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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