Investors have been on a rollercoaster in the last few months with regards to the cryptocurrency market. The landscape of crypto investing has shifted into something entirely different over the course of a year. Coins reached all-time highs in 2021 and then plummeted with alarming speed. Bearish trends have dominated getting into 2022. This week saw a flash, with currencies seeing big gains. While it seemed like things were on the mend, the market is back on a downward slope. Why is crypto down today? Well, it looks like crypto is lacking the endurance it showed last year.
The last two days of trading have stood in stark contrast to the first two months of the year. Bitcoin (BTC-USD), which had ebbed and flowed throughout that time, finally posted significant gains. After dipping near the low-$30,000 level in late February, its gains since Monday put it comfortably north of $40,000.
As Bitcoin saw success, so too did the industry at large. Indeed, Bitcoin’s market capitalization of over $800 billion makes the coin worth nearly half of the entire crypto market. Thus, its success brought out big gains in other players. Top gainers included Terra (LUNA-USD), which posted a single-day gain of over 23%, and layer-1 network Avalanche (AVAX-USD), which grew 17%.
Why Is Crypto Down Today? Bitcoin Sputters After a Brief Tear.
After such a tumultuous few weeks, the recent rally in crypto prices has been warmly welcomed by investors. Unfortunately, things came to an end faster than many had hoped.
Cryptocurrency in general just seems to be showing less endurance on its upward runs. Coins and tokens are generally trending down, with a few exceptions. For example, Cosmos (ATOM-USD) and Internet Computer (ICP-USD) remain in the green today.
There are a few factors at hand here. One reason is that cryptocurrencies obviously haven’t been performing to the 2021 standard; it will likely take some time before the market sees another steady bull run like it did some months ago. Another reason is that investors are generally tending toward less-volatile investments. Indeed, while crypto shows the occasional successful day, inflation woes and the ongoing turmoil between Russia and Ukraine are scaring investors out of high-risk investments. Rather, the trend suggests that stablecoin investments are where these buyers are finding refuge.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
