Tuesday wasn’t exactly a banner day to be an altcoin investor, as the assets leading the crypto pack were hit by sell-offs.
The prices of many altcoins fell on the day, with more than a few tumbling at double-digit rates. Among these unfortunates were Near Protocol (CRYPTO:NEAR) and The Graph (CRYPTO:GRT), both of which slid by over 10%. Emerging with relatively less damage was Helium (CRYPTO:HNT), down by “only” 7%.
In the crypto world, when Bitcoin (CRYPTO:BTC) sneezes, a vast number of other tokens catch a cold. That was certainly a mover behind the Tuesday drops of Near Protocol, The Graph, and Helium, as Bitcoin set the pace with a more than 6% slide.
There was little direct news with any of those coins that would have pushed their prices down. The same goes for Bitcoin.
The crypto leader likely suffered from a combination of the general financial asset trading lull between Christmas and New Year’s Day, and a recalibration of many mixed-asset portfolios that include comparatively risky holdings like cryptocurrencies.
Also, some brokerages are forcing/encouraging clients to liquidate more heavily leveraged positions at year-end. As Bitcoin is pricey these days and ever-volatile, it’s a prime candidate for such portfolio cleaning. That goes double for most altcoins.
Investors in Near, The Graph, and Helium shouldn’t be spooked by Tuesday’s price movements, even though — in the case of the first two coins — a double-digit drop isn’t easy to swallow. For example, Near Protocol is the native crypto of a proof-of-stake blockchain that could give Ethereum a run for its money, while Helium underlies a promising decentralized wireless network.
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.