- Crypto sell-off gathers steam
- Polkadot Cardano and DOGE resume lower
- Risk off mood amid rate hikes fuelling sell-off
Cryptocurrencies are increasingly losing ground after a stalled bounce back. A string of developments in the capital market are increasingly fuelling the sell-off wave as demand for risk continues to subside. Institutional investors shunning the sector amid growing concerns about the state of the US economy is one factor that continues to pound sentiments in the highly volatile sector.
Cardano, Polkadot, and Dogecoin are some of the coins under immense pressure after double-digit percentage losses on Wednesday. The coins had been in recovery mode after bottoming out. However, the bounce-back has stalled as short-sellers resume control.
Cardano is at risk of plunging back to its all-time lows of $0.33 after struggling to find support above the $0.60 level following the recent bounce back. A daily close below the $0.50 handle should give short-sellers a reason to push the coin lower despite the long-term downtrend.
However, ADAUSD finding support above the $0.50 handle should fuel prospects of a potential bounce back to the $0.60 pivotal level, above which it stands a fair chance of rallying back to the $0.90 handle. However, the coin looks set to edge lower with the Relative Strength Index below 50 and affirming bearish momentum.
Polkadot under pressure
Polkadot is another coin that has felt the full brunt of the broader crypto market crash. The coin is down by more than 60% year to date as the sell-off shows no signs of slowing down. A recent plunge below the $10 handle has opened the door for further losses as short sellers continue to engineer the sell-off wave.
DOTUSD’s next stop as part of the ongoing sell-off is the $7 handle, below which the coin faces the risk of plunging to the $3.84 handle. On the flip side, a rally followed by a daily close above the $11.94 resistance level could be the catalyst to fuel further price gains.
Dogecoin pull back
Meme coins have not been spared either amid the ongoing crypto crash. Dogecoin is one of the meme coins leading the slide lower, going by the 50% slide year to date. The hype that helped catapult the coin to all-time highs has slowed down.
While DOGUSD is deep into oversold territory, the prospects of further losses are still high as the broader sector remains under pressure. With the coin trading below the $0.1 handle, the risk of plunging to lows of $0.06 is high.
Why are Cardano Polkadot and Dogecoin tanking
Like many other riskier assets, Cardano, Polkadot, and Dogecoin remain under pressure owing to investors shunning the sector in the aftermath of interest rate hikes. The FED hiking interest rates in a bid to combat runaway inflation has left investors with no option but to pursue high-yielding investments such as bonds and treasuries.
As institutional investors exit the market amid concerns about the economy despite the rate hikes, cryptocurrencies are poised to be the biggest casualties. The implosion of stablecoin TerraUSD has only complicated the matter by sending fear in the investment community. Retail investors are increasingly offloading their stakes amid concerns that the implosion could never spill to other unstable coins.
After the recent stalled bounce back, Cardano, Polkadot, and Dogecoin look set to edge lower as short-sellers come back into the fold. Coins with no real technical advantage or real-world use are expected to feel the full brunt of the ongoing crypto crash.
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