Cryptocurrencies had a difficult week. After a positive start that saw Bitcoin rise to a multi-month high of $52,000, cryptocurrencies lost more than $300 billion in value. A closer look shows that most cryptocurrencies such as Bitcoin, Ether, Cardano, Ripple, and Chainlink fell by more than 10% in the last seven days. However, some tokens have managed to buck the trend. Let’s take a closer look at the main reasons behind these different developments.
Why the bitcoin price has fallen
To be clear, most cryptocurrency prices have crashed this week only because the bitcoin price has fallen. This is primarily because most cryptocurrencies have a close correlation with Bitcoin. In other words: Their prices fall when BTC rises and vice versa.
Initially, Bitcoin prices crashed due to profit-taking when the price rose to $52,000. This surge meant that bitcoin had gained more than $22,000 in just a few weeks. In most cases, Bitcoin prices tend to fall back after a strong rally and reaching a key resistance level. In this case, the resistance was at $50,000.
Second, the price dropped due to a situation known as “buying the rumours and selling the news”. In this case, the rumor was that El Salvador would adopt BTC as legal tender. The news was that the country was indeed adopting BTC as legal tender and even buying some tokens.
Eventually, things went downhill again after the new tussle between Coinbase and the Securities and Exchange Commission (SEC). The SEC accuses Coinbase of trying to market a financial product that it believes is a security.
Solana is a well-funded project that excels in speed, scalability, and interoperability. It is widely regarded as one of the leading Ethereum killers. In this week, Solana’s price climbed to an all-time high of $215.50, bringing its total market cap to more than $52 billion.
As a result, it rose to become the sixth largest cryptocurrency in the world after Bitcoin, Ethereum, Cardano, Binance Coin, and Tether. The chart below shows that SOL has risen more than 20% in the last five days.
Algorand is one of the fastest growing blockchain projects in the world. In fact, ALGO’s share price is up more than 140% this month. As a result, its total market value has risen to more than $10 billion. In just a few weeks, Algorand has become the 17th largest cryptocurrency in the world. Algorand is similar to Solana in that it offers a faster platform for creating DAPPs. It is also highly scalable. Here’s our latest Algorand price prediction.
Tezos is another cryptocurrency that bucked the trend this week. The XTZ price recovered its initial losses and rose by more than 45%. This recovery was mainly due to the performance of Non-Fungible Tokens (NFT). This is a fast-growing industry whose turnover in OpenSea surged to more than $3 billion in August. While most NFTs are Ethereum-based, Doja Cat, a popular musician, opted for Tezos. This is notable since she has millions of followers.