Insights

Why Ethereum, Dogecoin, and Polkadot are heading lower today

These top cryptocurrencies are taking a breather today.
The post Why Ethereum, Dogecoin, and Polkadot are heading lower today appeared first on The Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Top-15 cryptocurrencies Ethereum (CRYPTO: ETH)Dogecoin (CRYPTO: DOGE), and Polkadot (CRYPTO: DOT) were all trading lower Thursday. Over the past 24 hours, these cryptocurrencies sank 4.2%, 1.7%, and 6.1%, respectively, as of 1 p.m. ET.

These moves generally fell in line with the broader market sell-off today in major cryptocurrencies. The entire market dropped 3.6% in value over the past 24 hours, to a total of $2.29 trillion.

So what

A first-mover among smart-contract-enabled blockchains, Ethereum has grown into a potential challenger for Bitcoin for top spot in the crypto market cap rankings. Ethereum’s network is often viewed as the foundational building block of the decentralized finance movement, playing an integral role in many of the use cases we’ve seen of late.

However, investors appear to remain concerned about high gas fees (transaction fees) on Ethereum’s network. These fees have allowed lower-cost competitors such as Solana and Avalanche to gain ground on Ethereum’s market share. Accordingly, this token is seeing pressure today.

Dogecoin’s status as one of the most prevalent meme tokens makes this cryptocurrency a rather sensitive one to market sentiment. In hyper bull markets, this is a good thing. Recently, Dogecoin has rapidly moved to the upside.

That said, in a down market fueled by a rather bearish tone, many investors appear to be rotating out of Dogecoin. Dogecoin can be viewed as a momentum play on the broader market, and more specifically, risk assets. Right now, it appears investors are content to sit on the sidelines with this dog-inspired token.

Polkadot is certainly an interesting token, in that it’s been trending in the wrong direction over the past month. Polkadot’s decline today has brought this token more than 50% below its early November peak. 

Today’s decline in Polkadot is on little news, suggesting broader market momentum is at play with this token.

Now what

Today’s widespread decline appears to be amplifying the negative catalysts already at play with these three tokens. It’s clear that broad capital flows into the crypto sector act as tides, taking most boats (tokens) higher or lower over specific periods of time. With the tide ebbing, investors seem to be content waiting for the dust to settle.

That said, each of these tokens have longer-term catalysts that bulls may look at in a different light, should the tides shift anytime soon. Right now, predicting which direction the crypto market will move from day to day seems to be a fool’s errand. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Ethereum, Dogecoin, and Polkadot are heading lower today appeared first on The Motley Fool Australia.

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More reading

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Why Ethereum, Dogecoin, and Solana Fell This Morning

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Chris MacDonald owns Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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