Altcoins to Buy, 4 Metaverse Tokens Outperformed Bitcoin in Sell-Off

  • Bitcoin has fallen more than 15% to around $58,000 since its all-time high of nearly $69,000.
  • This came as the Securities and Exchange Commission (SEC) rejected the Bitcoin spot ETF and the infrastructure bill was signed into law.
  • Insider 5 asked crypto experts what is behind the short sale and why tokens hold the metaverse better.

Bitcoin price fell more than 15% to around $58,000 on Friday after hitting a new all-time high of $68,998 on November 10.

From a technical analysis perspective, the largest cryptocurrency has broken the near-term psychological support of $60,000, with the next important support level at around $54,000, according to commentary from the trading desk at Genesis Trading.

The overall cryptocurrency market shrank by $500 billion as both traditional funding and crypto-origin accounts were seen “reducing significant amounts of risk.”

“We saw widespread selling across our entire franchise yesterday, with a 5:1 bias for selling in overall flows,” the trading desk said in a research update Friday morning. “The general trend was to go up in the


market cap

A table with alternatives being sold for ETH and ETH for BTC.”

Bitcoin’s drop came when the SEC rejected VanEck’s bitcoin spot ETF and President Biden signed the infrastructure bill into law, which included a provision that dramatically increased tax reporting requirements for crypto firms. Meanwhile, the derivatives market has also been experiencing structural pressures since the launch of the first ETF based on bitcoin futures, according to Judy Jonesberg, managing director of CoinDesk Indexes.

“The volume of underlying futures contracts more than quadrupled in two days, open interest almost doubled in those two days, and now it has tripled its level before the launch of the ETF,” she said in an email interview. “The cost of trading futures, which should only be prohibitive in theory when the price is expected to rise, continued to grow during the month, so [it] It is now a third more expensive, despite the drop in the price of Bitcoin.”

What is behind the massive Bitcoin sale?

Joseph Edwards, Head of Research at Crypto


Liquidity

Provider, Enigma Securities, feels the sell-off was driven, above all, by derivatives.

“There has been a trend during 2021 for traders to buy very aggressively in all-time high breakouts, and they have been penalized repeatedly over the past two months,” he said in an email interview.

Sui Chung, CEO at CF Benchmarks responsible for the crypto standard, believes the recent decline, marked by daily declines of about 5%, was “fairly bland” and derives more from immediate physical activity.

“In addition, very few market participants believed that the VanEck spot ETF would be approved due to Commissioner Gensler’s frequent negative comments about the concept, so it was already priced in,” Chung said in an email interview. “When it comes to the reason for this sale, our view is that it could potentially be a profit taking.”

Noel Acheson, head of market insights at Genesis Trading, adds that traders may also be concerned about the potential influx of sellers’ bitcoin into the market.

She said one source of selling pressure comes from the eventual plan to compensate creditors of defunct crypto exchange Mt. gox. Creditors can sell up to $9 billion in bitcoin once payments are received, but the timing remains unclear. In addition, many creditors are hedge funds and may not sell.

Another concern is the ongoing civil lawsuit in Miami, which centers on the identity of mysterious bitcoin creator Satoshi Nakamoto and rights to the 1.1 million bitcoins that Nakamoto mined in the early days.

“Some merchants have expressed concerns that a plaintiff’s victory may lead to the release of a significant portion of the locked coins,” she explained in a research note Thursday evening. “This is more unlikely than the dreaded Mt. Gox scenario, in which the defendant repeatedly fails to provide evidence that it has access to the BTC in question, even if it loses.”

Bitcoin miners, who recently became net sellers for the first time since early October, may also impact the market. It added that, though, over the past year none of the previous miner’s backlog had “turned off”, leading to massive sell-offs.

Better carry Metaverse codes and games

Amid the bitcoin sell-off, many crypto-watchers have noted that gaming tokens and metaverses not only held up better, but also continued to advance.

for example, decentralization (where), sand (sand) and enjin . coin (ENJ) is up about 29%, 65% and 17% respectively in the past seven days while Bitcoin is down more than 9% in the meantime.

“I think people like to play games no matter what, and that behavior is not unlike what we see a lot in the stock markets,” said Gunzberg. “Also, a dip in the ether, or any coins required to play, could increase the demand for play even more by enabling people to start at a cheaper rate.”

The massive rally, despite the cryptocurrency’s decline, could also have been driven by a combination of endorsement by big-name companies and increased venture capital funding in the space.

“There have been a lot of transactional funds that are just raising capital in order to grow the ecosystem within these virtual worlds and play-for-profit economies,” said Armando Aguilar, Vice President of Digital Asset Strategy at Fundstrat. in an interview. “We remain very optimistic about Metaverse.”

His favorite gaming and metaverse tokens are star atlas (atlas), sand (sand), party games (Gala) and Returning Guild Games (ASB).

However, the separation between metaverse tokens and major cryptocurrencies could break in the long run.

“We would be surprised if this turned into a trend,” said Edwards of Enigma Securities. “The most likely scenario is that the metaverse plays out over the next few months without the knowledge of short-term plays, with the potential for a collapse of the overall trend in the cryptocurrency on a large scale to eliminate that.”

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