Avoid trading these 3 cryptocurrencies as selloffs dominate the market
This week, three popular and highly capitalized cryptocurrencies have experienced significant sell-offs, causing concern in the cryptocurrency market. These sell-offs can lead to market volatility as traders speculate on the impact of increased supply pressure on prices, increasing the risks involved.
The entire cryptocurrency landscape has been hit hard, with most projects experiencing double-digit losses this month. In total, over $304 billion has left the market since its peak of $2.6 trillion on June 5.
In this context, there are three cryptocurrencies that present a higher risk than most. Despite being among the most valuable tokens in the space, they have seen a remarkable amount of sell-off activity.
Firstly, XRP, the native token of the XRP Ledger, has a market cap of $27.10 billion and is ranked seventh. Ripple, the company behind XRP, has been consistently selling off large amounts of tokens every month since its launch. However, June’s sell-off has been the largest to date, with 400 million XRP spent from the treasury account, equivalent to $200 million at an average monthly price of $0.50 per token. While Ripple has already spent the tokens, their gradual release into the market may impact the price of XRP.
Secondly, Avalanche (AVAX), with a market cap of $10.30 billion, has experienced a sell-off after a mysterious whale started selling AVAX on multiple exchanges. This has caused panic-selling and a nearly 5% loss in value in the last 24 hours. Avalanche is currently trading at $26.14, with a year-to-date loss of 32.18%.
Lastly, Chainlink (LINK) is another cryptocurrency to be cautious of this week. The project’s vesting contracts have put 21 million LINK in circulation, leading to a massive sell-off worth nearly $300 million. This represents 3.5% of Chainlink’s $8.4 billion market cap and can create significant supply pressure on the exchange. LINK is currently trading at $13.79, with a month-over-month loss of 14.26%.
Traders and investors should closely monitor the activities of these cryptocurrencies to make informed decisions. Large sell-offs are common in volatile markets, and many projects are still dealing with ongoing supply inflation, which exacerbates the situation. It is important for investors to study the tokenomics of each cryptocurrency to avoid being caught in the exit strategy of early whales.
Disclaimer: The content of this article should not be taken as investment advice. Investing in cryptocurrencies carries risk, and your capital is at risk.
