The cryptocurrency dipped below the widely tracked 200-day moving average (MA) early Tuesday, joining peers from other crypto sub-sectors in signaling a gloomy market mood. The coin slipped under the critical $2.93 level during the Asian hours, dropping to the lowest since Jan. 25, according to Binance data tracked by charting platform TradingView. It last traded under the 200-day MA in July 2021.
e Sandbox introduced a staking mechanism on scaling solution Polygon earlier this month, allowing users to stake SAND without having to worry about gas fees (transaction costs). The move, however, failed to arrest the decline toward the 200-day MA. Staking refers to the process of locking up coins in a blockchain for a specific period to contribute to the security in return for rewards.
Bitcoin, the top cryptocurrency by market value, dropped under the average in late December. A week later, ether, the second-largest, and play-to-earn game Axie Infinity’s AXS coin followed suit. Heavyweights from other sub-sectors like UNI, LINK, XMR, AAVE, PERP and YFI also fell below their 200-day MAs early this year.
“Majorly professional traders track the high-level indices like total alternative cryptocurrencies’ market capitalization and total crypto market value,” said Jeetesh Tipe, founder and CIO of Mumbai-based crypto asset management firm MintingM. “Both metrics are now trading under the 200-day MA, hinting at prolonged consolidation.”
Independent market strategist and crypto enthusiast Ravi Jain suggests otherwise. “Major coins trading below 200-day MA perhaps signals more pain ahead for the market,” Jain told CoinDesk in a WhatsApp chat. “We got a perfect bull market top signal three months ago when bitcoin did not sustain its all-time high on Fed rate hike fears. Since then, bitcoin has cratered with other coins following suit.”
“I use the long moving averages quite a lot … as do many others. However, please note that it is a lagging indicator. Consequently, it should be used in conjunction with others, never on its own,” said Eddie Tofpik, head of technical analysis and senior markets analyst at London-based ADM Investor Services International.
Macro factors appear have aligned bearishly. “Tensions in Europe could be an essential factor in the short term,” said Griffin Ardern, a volatility trader from crypto-asset management company Blofin. “In a tense situation, investors will prioritize commodities such as gold and crude oil rather than riskier stocks and cryptos.”
Russian President Vladimir Putin ordered troops to invade Eastern Ukraine early today, sending gold higher and stock markets lower. So far bitcoin has remained largely directionless. “If bitcoin and ether cannot recover, most investors will not pay more attention to other altcoins,” Ardern said, adding there is no particular reason to push crypto higher at the moment and the decline will probably continue with the Federal Reserve likely to announce a rate hike in March.
This content was originally published here.