Interestingly, the past week has been a relatively stable one in the world of cryptocurrencies. On an aggregate basis, the crypto sector has slightly gained ground over the past seven trading days (the crypto markets are open 24/7). However, certain tokens outperformed others, and there are some notable gainers and decliners worth noting.
Among the top three decliners over the past week investors may want to keep their eye on are ApeCoin (CRYPTO: APE), Arbitrum (CRYPTO: ARB), and Internet Computer (CRYPTO: ICP). These three tokens declined 15.9%, 12%, and 10.9%, respectively, over the past week, meaning there are key project-specific headwinds investors are pricing in with these specific projects.
ApeCoin’s decline over this past week appears to be tied to a token unlock scheduled for this Sunday, Sept. 17. At the beginning of next week, more than 40 million tokens will be unlocked and available for sale. Investors appear to be concerned about potential near-term selling pressure and are getting out ahead of this token unlock.
Of course, it’s impossible to know how many tokens will ultimately be sold and what the impact on ApeCoin’s price will be. Additionally, most early-stage crypto projects have vesting cliffs in which tokens are released over a period of time for insiders and early investors, who then are able to recoup some of their investment (via capital or sweat equity) at points in time. This will certainly be an intriguing project to keep an eye on moving forward.
Arbitrum’s decline appears to be tied to outsized leverage from traders, with reports that $2.2 million in long liquidations have taken place over the past two weeks. As with most cryptocurrencies, leverage is used (to a greater degree than in other markets) by many traders to amplify their near-term returns. If bullish positions get unwound in short order, such dips can take place. Investors appear to have been increasingly bullish on this project due to a proposal earlier this month, which appears to not have provided the juice many had hoped for.
Finally, Internet Computer has seen bearish sentiment build over its token from some time as noted by a number of prominent experts in the crypto realm.https://www.investorsobserver.com/news/crypto-update/internet-computer-icp-receives-a-bearish-rating-thursday-is-it-time-to-get-on-board As most digital assets are difficult to value from a fundamentals perspective, sentiment can matter a great deal for these tokens. Investors are seeing the unfortunate reality of what a swing to a more bearish stance means in the near term.
As is the case with equities, a flat market isn’t usually as it appears on the surface. There will always be winners and losers on a weekly basis, and these prominent crypto projects have the unfortunate distinction of making the top decliners list this week.
While the reasons for these declines vary, these short-term moves could indicate value for long-term investors bullish on the prospects of these projects. I’m on the sidelines when it comes to these three, but I do think staying apprised of market developments with these three projects is worthwhile.
10 stocks we like better than ApeCoin
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and ApeCoin wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 11, 2023
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Internet Computer. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
