Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH), and Dogecoin (CRYPTO:DOGE) are down 9.38%, 14.56%, and 17.44% respectively in the past seven days as of 9:00 a.m. EDT. They are now trading at $46,000.54, $3,378.97, and $0.2479 per coin respectively. After a record bull recovery, cryptocurrencies are witnessing significant fatigue amid more regulatory scrutiny, internal strife, and “altcoin rotation,” which is similar to sector rotation for stocks.
When Bitcoin’s market cap approached $1 trillion, both governor Stefan Ingves of Riksbank (Central Bank) Sweden and governor Alejandro Diaz of Bank of Mexico criticized the currency as a stable medium of exchange, citing its significant trading volatility.
As for Ethereum, the coin is witnessing a low-scale “civil war” after the network became increasingly unfriendly to miners due to co-founder Vitalik Buterin’s desire to reducing its energy consumption. Out of a total of around 9,000 Ethereum nodes, or computers running software to keep the public ledger in order, 6,500 have disappeared from the network in the past two weeks. They’ve likely hard-forked and migrated to a new chain along with a subset of dissatisfied miners.
Lastly, Dogecoin is facing a great deal of uncertainty after the chairman of the U.K.’s Financial Conduct Authority, Charles Randell, targeted celebrity influencers such as Kim Kardashian for promoting high-risk altcoins that could very well turn out to be scams. Dogecoin is one of the most heavily promoted altcoins out there, touted by celebrities such as Tesla‘s CEO, Elon Musk, and the billionaire owner of the Dallas Mavericks, Mark Cuban. What’s more, a meme competitor coin called Wifedoge seems to have diverted investors’ attention of late with its sudden rise.
Finally, keep in mind that investors have been pulling funds out of major cryptocurrencies all week to participate in the Solana (CRYPTO:SOL) mania. The decentralized applications token has risen to around $200 apiece from roughly $1.50 at the beginning of the year.
The overall market cap of cryptocurrencies has nearly doubled since their nadir in May and is long due for a pullback. Even though blockchain innovations, such as the decentralized finance space, are rapidly gaining traction and may grow to as much as $800 billion next year, it can take quite some time for the market to take off again. So consider buying the dip in the meantime.
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