What happened

This weekend, the entire crypto sector took a beating. This bloodbath extended from large-cap cryptocurrencies to smaller alt coins, with most tokens down substantially. 

Today, Filecoin (CRYPTO:FIL)Celo (CRYPTO:CELO), and Kusama (CRYPTO:KSM) were all down more than 20% since Friday close, as of 2pm ET.

Globe with currency symbols floating above.

Image source: Getty Images.

So what

This crypto crash did not spare many tokens, with nearly every cryptocurrency down Friday evening and early Saturday morning. While some tokens did recover, Filecoin, Celo and Kusama remain 24.3%, 24.4%, and 21.1% lower as a result of this weekend's crash.

These tokens are all top-100 tokens in terms of market capitalization, but are also among the more speculative, higher-growth tokens investors look to for aggressive growth. Given the pervasive risk-off sentiment in the market today, these tokens are getting pummeled much harder than many larger crypto tokens.

Various factors appear to be at play driving this crash. Experts suggest that speculative momentum around overcrowded trades have driven some profit-taking on this rapid decline. Crypto derivatives and the ability for investors to ramp up leverage in crypto markets is another factor investors are taking into consideration. Additionally, a high-profile hack of BitMart this weekend has crypto investors on edge.

Now what

Given how far the crypto sector has run in recent months, perhaps some sort of breather was in order. However, given the velocity of this crash, investors certainly may be concerned about the amounts of leverage, and momentum-driven declines, that are possible in the crypto sector relative to other asset classes.

Investors in any token should be aware of these risks, and act accordingly. Proper position sizing and risk management, according to each individual investor's risk tolerance level, should be incorporated when building a crypto portfolio.

Over the past 24 hours, Filecoin, Celo and Kusama are all lower, though it appears the bleeding is slowing. Accordingly, perhaps this is a dip longer-term investors may want to consider, keeping in mind the volatility of these investments.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.