The crypto market has been on a decline over the past six months, with its valuation dropping from over $3 trillion in November 2021 to $1.23 trillion in May 2022. This decline has been brought about by a number of factors, including fears of persistently higher inflation, the Federal Reserve’s hawkish response to it, and the ongoing conflict between Ukraine and Russia. Investors have been limiting their exposure to riskier assets and instead looking for safe-havens such as the U.S. dollar, which has weighed down demand for some of the top cryptocurrencies and U.S. equities.
As a result, some digital assets, such as Dogecoin (DOGE) and Cardano (ADA), have seen their prices fall by more than 80% from their record highs established last year. Other tokens have seen more modest declines, but still have been affected by the overall market downturn. In this article, we take a look at three of these tokens, Monero (XMR), UNUS SED LEO (LEO), and Binance Coin (BNB), to see how they have been affected by the market decline.
Monero (XMR) is a privacy-focused cryptocurrency that has seen a limited downside since November 2021, with its price dropping nearly 40% to $186 from its November 2021 peak of around $300. This decline has come despite reports that it’s been used to bypass sanctions, and fears of strict regulations looming over the crypto market which have boosted the speculative demand for Monero. From a technical perspective, XMR has been consolidating in a range defined by its 50-week exponential moving average (50-week EMA; the red wave) around $211 and 200-week EMA (the blue wave) near $167, underscoring a bias conflict.
UNUS SED LEO (LEO) is a utility token backed by iFinex – the parent company of BitFinex exchange – and has been largely unfazed by the broader crypto trends. The token continued its uptrend even as its rivals in the top-30 moved lower after November 2021, and reached an all-time high of around $8.15 in February 2022. However, it has since corrected by almost 40%, now trading at around $4.90.
iFinex introduced LEO in a private token sale to raise $1 billion back in 2018 to alleviate the cash shortfall it had incurred after the partial fund seizure of its payment processor, Crypto Capital. The firm also committed to allocating 95% of the recovered Crypto Capital funds and 80% of the funds from the BitFinex hack in 2016 to buy LEO, and LEO’s returns to date now stand around 100%. It appears heavily centralized, with a so-called centralized exchange whale still holding around 97% of its net supply, according to data from Santiment.
Binance Coin (BNB) is a utility token inside the Binance ecosystem, including the world’s leading crypto exchange by volume and a native blockchain named BNB Chain. The token holders also get to submit proposals via BNB Chain’s built-in governance module, which are then voted on. BNB topped out in early May as its price per token crossed over $700. Then in November 2021, the BNB/USD pair almost retested its record high before correcting lower with the rest of the market. In doing so, it wiped out more than half of its valuation, now trading around $325.
Top cryptos, Bitcoin (BTC), and Ethereum’s native token, Ether (ETH), have also fared better than most of their top-ranking rivals in the ongoing bear market. BTC’s price has dropped by 57% to around $29,300 from its November 2021 record high of $69,000. Meanwhile, the second-largest crypto, ETH, has plunged 60% to around $1,975 from above $4,850 in the same period. Shiba Inu (SHIB) and Polkadot (DOT) are down 65% from their record highs of $55 and $0.00008760, respectively.
The crypto market downturn has been a difficult time for many investors, but it is important to remember that the market is cyclical and that it will eventually recover. While it is difficult to predict when the recovery will begin, it is important to remember that there are still opportunities to be had in the crypto market and that there are tokens that have held up better than others. It is also important to remember that the market is still young and that there is potential for long-term growth. As always, it is important to do your own research and to make sure that you are comfortable with any investments you make.
