What happened
Three of the most-watched cryptocurrencies in the market are once again sinking, as investors appear to be taking a sniper-rifle approach to picking tokens today. As of 3 p.m. ET, Bitcoin (CRYPTO:BTC), Dogecoin (CRYPTO:DOGE), and The Sandbox (CRYPTO:SAND) dropped 1%, 2.1%, and 2.8%, respectively, over the past 24 hours.
Each of these three tokens saw losses in excess of the broader crypto market, which dropped 0.7% over this same time frame.
Image source: Getty Images.
So what
Interestingly, a number of small-cap alt coins have picked up momentum to start the year. Investors appear keen on diversifying their crypto portfolios, focusing on gaining exposure to higher-growth cryptocurrencies targeting niche-use cases. Bitcoin prices have stagnated since the beginning of December, trading within a relatively narrow band over the past month.
Meme-token Dogecoin and metaverse crypto token The Sandbox have also failed to gain momentum of late. Investors who saw impressive gains in 2021 appear to have taken profits in December, as well, and this selling pressure is continuing into the new year.
It appears investors are rotating out of crypto tokens that have had incredible runs this past year into tokens with the potential to see outsized gains in 2022. How the market ultimately comes to a consensus on which tokens will take off remains to be seen. However, it’s clear that Bitcoin, Dogecoin, and The Sandbox don’t have significant momentum behind them at the moment.
Now what
Intense volatility in the crypto world has provided some rather extreme swings to the upside and the downside in 2021. Right now, it appears the entire market is taking a bit of a breather. Given how violent some of the moves have been last year among most cryptocurrencies, a breather may be welcomed by many investors.
Of these three tokens, Bitcoin is most likely to continue to be a relative beacon of stability in the crypto world. Dogecoin and The Sandbox are likely to see momentum-driven rallies and declines moving forward. However, until investor attention shifts toward these tokens, each of these three tokens may see muted gains and losses for some time.
Those hoping for a more stable 2022 have gotten what they asked for, thus far. That said, things can change on a dime. And as we’ve seen with cryptocurrencies, this is far from a boring space in which to invest.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
