Solana, Algorand, Tezos prices bucked the trend this week. What next?
Cryptocurrencies had a difficult week. After starting on an upbeat trend, with Bitcoin soaring to a multi-month high of $52,000, cryptocurrencies lost more than $300 billion worth of value. A closer look shows that most cryptocurrencies like Bitcoin, Ether, Cardano, Ripple, and Chainlink have dropped by more than 10% in the past seven days. But some tokens managed to buck the trend. Let us look at the main reasons why cryptocurrency prices crashed and those that soared.
Why Bitcoin price declined
To be clear, most cryptocurrency prices crashed this week simply because Bitcoin price dropped. This is primarily because most cryptocurrencies tend to have a close correlation with Bitcoin. In other words, their prices tend to decline when BTC rises and vice versa.
First, Bitcoin prices crashed because of profit-taking as its price rallied to $52,000. This rally meant that Bitcoin had gained by more than $22,000 within a few weeks. In most cases, Bitcoin prices tend to retrace after staging a strong rally and after hitting a major resistance. In this case, the resistance was $50,000.
Second, the price declined because of a situation known as buying the rumours and selling the news. In this case, the rumour was that El Salvador was making BTC a legal tender. The news was that the country, indeed, made it a legal tender and even bought some of it.
Finally, it declined after the new tussle between Coinbase and the Securities and Exchange Commission (SEC). The SEC accuses Coinbase for planning to launch a financial product that it says is a security.
Solana is a well-funded project that prides itself for speed, scalability, and interoperability. It is widely seen as one of the leading Ethereum-killers. This week, Solana price surged to an all-time high of $215.50, pushing its total market capitalization to more than $52 billion.
As a result, it rose to become the sixth-largest cryptocurrency in the world after Bitcoin, Ethereum, Cardano, Binance Coin, and Tether. The chart below shows that SOL has jumped by more than 20% in the past five days.
Algorand is one of the fastest-growing blockchain projects in the world. Indeed, the ALGO price has jumped by more than 140% this month. As a result, its total market value has jumped to more than $10 billion. In just a matter of weeks, Algorand has become the 17th biggest cryptocurrency in the world. Algorand is similar to Solana in that it has a faster platform for building DAPPs. It is also highly scalable. You can read our recent Algorand price prediction here.
Tezos is another cryptocurrency that bucked the trend this week. The XTZ price erased the initial losses and bounced back by more than 45%. This rally was mostly because of the performance of non-fungible tokens (NFT). This is a fast growing industry whose revenue in OpenSea jumped to more than $3 billion in August. While most NFTs are built on Ethereum, Doja Cat, a popular musician decided to use Tezos. This is notable since she has millions of followers.