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The Crypto Market is Down But Several Coins Are Still Mooning

The cryptocurrency market is going through something of a mini-slump right now. Bitcoin has fallen by 7.5% in the past week (as of writing), while at $60,000, it’s nearly 13% down from its recent all-time high of $69,044. Likewise, other major cryptocurrencies such as Ethereum, Cardano and Polkadot are down by anything from 8% to 12% in seven days.

In fact, things are even a little worse than they seem right now, since BTC sank as low as $59,000 at one point on Wednesday November 17, while ETH nearly dipped below $4,000. At the same time, the cryptocurrency market’s total cap sank by as much as 17% from an all-time high of around $3 trillion, wiping roughly $500 billion off its value in a matter of days.

You’d therefore be forgiven for thinking that the market is in trouble right now, and that if it isn’t sinking, it may continue stagnating in the near future. However, what’s interesting about the cryptocurrency market (for better or for worse) is that, at the same time as pretty much all the biggest coins are flatlining, a surprisingly large number of smaller altcoins are rallying and even reaching record highs. This presents impatient traders with a means of enjoying gains during an ostensible bear market, even if the possibility of whale-led pumps could lead to them getting wrecked.

It was another moon month for Bitcoin.

These Cryptocurrencies Are Exploding During a Bear Market

If you take a look at the price charts on either CoinGecko or CoinMarketCap, you’ll see that a good number of altcoins have enjoyed double-digit gains over the past seven days, or even across the past 24 hours (as of writing). Here’s a condensed list of them:

  • Gala (GALA): at $0.246600, up by 52% in a day and by 200% in a week

  • Render Token (RNDR): at $6.09, up by 27% in a day and by 183% in a week

  • DeFi Kingdoms (JEWEL): at $8.14, up by 28% in a day and by 137% in a week

  • WAX (WAXP): at $0.967447, up by 18% in a day and by 93% in a week

  • The Sandbox (SAND): at $4.15, up by 16% in a day and by 81% in a week

  • Coin (CRO): at $0.571834, up by 21% in a day and by 73% in a week

  • Dvision Network (DVI): at $1.96, up by 10% in a day and by 72% in a week

  • Decentraland (MANA): at $3.64, up by 10% in a day and by 46% in a week

  • Yield Guild Games (YGG): at $8.31, up by 25% in a day and by 40% in a week

  • Avalanche (AVAX): at $104.93, up by 5% in a day and by 23.5% in a week

These aren’t the only coins that have experienced gains while the rest of the market — including the most established cryptocurrencies such as bitcoin and ethereum — have slumped. And what’s most significant about their rises is that many have resulted in fresh all-time highs, with GALA, SAND, CRO, AVAX, RNDR, JEWEL and DVI all recording new records in a matter of minutes, hours or (only in the case of DVI) days ago.

Why is this the case? Well, there are two fundamental reasons, both of which interpenetrate each other to varying extents (depending on the cryptocurrencies concerned). We’ll take them both in turn.

Genuine Growth and Bullishness

For some of the above altcoins, there remains a real and emerging sense that they do have bright futures ahead of them. As such, traders and investors have turned more heavily towards them, in order to compensate for the fact that most major cryptocurrencies are slumping.

This is certainly the case with the ‘metaverse’ coins, cryptocurrencies whose native platforms are essentially some kind of virtual gaming world, often based around non-fungible tokens and other digital collectibles. This would include the Sandbox (SAND) and Decentraland (MANA), which had already emerged as new favorites for bulls around two weeks before the current market-wide slump. Other altcoins rallying at the moment can also be lumped into this metaverse category (e.g. GALA, YGG, JEWEL), yet it’s these two in particular that arguably have the most long-term potential, for various reasons.

For instance, the Sandbox recently celebrated attracting a $93m investment from SoftBank and other notable VC firms. Such an injection of capital will likely boost its ability to grow its platform and attract more users, although the network had already generated over $144 million in revenues to date (up until then) and registered  around 500,000 wallets.

This indicates genuine growth that the market has latched onto, and when you combine it with Facebook’s move into the metaverse (which may therefore become very big one day), investors have identified SAND (and other similar tokens) as one source of hope in a currently shy market.

The same goes for something like Avalanche. This isn’t a ‘metaverse’ platform but it has been clocking up some encouraging growth. Not only did it raise $230m from venture capital funds in mid-September, but its total value locked in has jumped from around $300m in mid-August to $11 billion. This again suggests the kind of organic growth that gets the market weak at the knees.

Source: DefiLlama

Day-Traders and Whales Looking for Profit During Lean Times

But even though some of the above altcoins have fundamental reasons why they might rally, so do many of the bigger cryptocurrencies that are currently slumping. In other words, it’s pretty strange that a handful of semi-obscure coins are posting ridiculous growth while the market looks set for a bear winter.

Of course, this is crypto, so there’s a convenient, plausible and highly probable explanation at hand. Namely, whales and big day-traders are likely pumping up hyped coins such as SAND, MANA and others so that they can continue to make a profit even though the overall market is basically sleeping right now.

Research into bitcoin’s history, for example, has shown how whales (i.e. big holders/traders) can move the cryptocurrency’s price with only one or two large orders. Similarly, the top 10 Ethereum addresses account for just over 20% of all ETH in circulation.

Given that bitcoin and ethereum have long been the two biggest cryptocurrencies, it stands to reason that whales and other large traders could even more easily move the prices of smaller coins. This is probably what’s happening with the altcoins currently surging, even if some of them still have good reasons for appreciating in value.

Because of this, anyone looking to make a profit from the surging altcoins should take a step back and think twice. If the coin has already been surging for a while, if its relative strength index has moved into ‘overbought’ territory (for example), it may be better to leave it alone. And if the overall market recovers, we could even see the altcoins above tanking drastically, as larger traders move back to bitcoin and the like.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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