Why Bitcoin, Ethereum, and Dogecoin Are Taking a Breather Today

As we begin a short week, investors in a variety of speculative assets are seeing increasing selling pressure. Of course, there are many macro reasons for this uneasiness. Some pretty significant inflation readings are due out later this week, and they could impact everything from growth stocks to commodities to cryptocurrencies. Nowadays everything depends on interest rates.

In the crypto world, Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH) and Dogecoin (CRYPTO:DOGE) are among the megacap tokens that saw a decline today. Over the past 24 hours, these three tokens have fallen by 3.8%, 3.5% and 4%, respectively, as of 14:30 UTC.

Let’s take a look at what triggered today’s price action in these top tokens.

Enthusiasm for basic catalysts is waning

Those invested in these three megacap tokens have been up quite a bit over the last few weeks and indeed since the beginning of the year. Bitcoin got the party started with the approval of a dozen spot exchange-traded fund (ETF) products, creating significant demand for its token. This, along with the halving event where the amount of newly minted Bitcoin is halved, has created a supply-demand dynamic that investors enjoy.

Ethereum has seen similar catalysts come into play recently, and the Securities and Exchange Commission (SEC) approved spot Ethereum ETFs last week as well. Additionally, previous upgrades have caused Ethereum to become less inflationary and deflationary based on token burn metrics based on transaction volumes depending on the day.

As a more speculative asset, Dogecoin further increased the market’s momentum. But with these catalysts now in the rearview mirror (it’s truly surprising how quickly the market adjusts to news, especially in this space), some investors may be considering selling this news and patiently waiting for another catalyst to kick in. A similar “selling the news” effect occurred immediately following the anticipated approval of spot Bitcoin ETFs earlier this year.

Until the next catalyst comes into play, investors appear to be pausing for the next reason to bet big on this sector (and by default, these three tokens).

A pause or a comeback in the rally?

The question now is: Is this latest decline a sign of more downside to come, or is it a period of consolidation before the next rally? A speculative wave that hit the crypto sector earlier this month sent everything from meme tokens like Dogecoin to major cryptocurrencies like Bitcoin and Ethereum even higher. But since then, it appears that the broader crypto market is waiting for the next catalyst on the horizon.

The story continues

There is an absolutely tremendous amount of innovation and technological movement taking place beneath the surface in the crypto realm. I wouldn’t be surprised to see any of these three tokens making headlines as they could push the market higher, and all three benefit from positive news. I don’t know what the catalyst will be or when positive momentum can be expected to re-establish. For now, I’m watching this price movement from the sidelines with pleasure.

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Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Why Are Bitcoin, Ethereum, and Dogecoin Taking a Breath Today? Originally published by The Motley Fool.