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This week on the cryptocurrency market started with strong price performance on most digital assets, but the scene we are seeing now is far from what we could call a recovery. Most assets returned to the red zone, and cryptocurrencies that remained on the verge of a breakout are now reversing down.
Memetokens in tough spot
Both Shiba Inu and Dogecoin are not performing well or are at least neutral in the downtrend we have been seeing for the last few months. The main reason is the lack of inflows into extremely risky assets like Shiba Inu.
As demand for risk remains at an extremely low level, traders and investors tend to choose more stable options, usually outside of the cryptocurrency market altogether. Those who left their funds in digital form are moving them away from exchanges, or "tethering out" completely until the situation on the market changes in a positive way.
In addition to the problem with risk demand, Shiba Inu is in a tough spot in terms of fundamental value as it still has almost no use cases, and the metaverse developed in the background does not seem to be attracting enough institutional funds.
As for Dogecoin, Vitalik Buterin's attempt to make smart contracts on the network possible seems to be in the embryonic stage and has not found the needed developer support. However, the successful implementation of the technology on Dogecoin would make it more intrinsically valuable.
Altcoins are returning to beginning
Despite the recovery we saw last week, the majority of digital assets, including XRP and Monero, are going through a tough stage right now. XRP's successful surge after Ripple's success in court ended with the cryptocurrency tumbling back to the point where the whole rally started.
The lack of market support is the main reason behind the reversal. According to the on-chain data, the majority of buying support was provided by retail investors, which means that the provided volume was not nearly enough to maintain the same growth pace for more than a few weeks.
As for Monero, the privacy coin is still moving in a local downtrend, which might end up being a descending flag pattern that appears after a rapid price increase. The pattern acts as a short-term cooldown for rallying assets and usually launches the continuation of a rally.
At press time, XMR is moving in the green zone with a mild 0.9% price increase in the last 24 hours. Unfortunately, XRP does not show the same tendency and has lost more than 1% of its value since yesterday, actively testing the 50-day moving average support.
Mushumir Butt
Gamza Khanzadaev
Tomiwabold Olajide
