Cryptocurrencies were grappling with a wild weekend of moves on Monday morning and investors didn't quite know whether values were going up or down. Polkadot (DOT -2.74%), Axie Infinity (AXS), Near Protocol (NEAR -3.15%), and Chainlink (LINK -2.96%) were among those moving lower, but the sell-off was widespread.
As of 2:30 p.m. ET, Polkadot is down 3.5% over the last 24 hours but is down 26.8% in the past week and now has a market cap of just $26.5 billion. Axie Infinity is down 6.6% over the last day and 25.3% in the past week to a $6.1 billion market cap. Near Protocol is off 6% today and 17.9% over a week, and Chainlink has fallen 4% in 24 hours and 27% in the past week.
There was a huge sell-off over the weekend as investors panic sold most cryptocurrencies around the world. In some cases, cryptocurrencies lost 25% of their value in just a few hours. There were reports of big holders moving crypto to exchanges so they could sell, excess leverage for retail investors, and downright panic for everyone.
Uncertainty continues to be the name of the game in the markets overall as well. Growth stocks are falling along with cryptocurrencies, investors are worried about inflation and rising rates, plus there's the constant threat of regulation for the crypto industry from Washington, D.C. This uncertainty has caused the downward trend for crypto.
As much as this move hurts, you can see that these cryptocurrencies are still up big with Axie Infinity and Near Protocol not shown but up nearly 200 times and five times, respectively, so far this year.
As some investors flee to bigger, more stable cryptocurrencies, these smaller altcoins are being sold off rapidly.
Volatility is common for cryptocurrencies but what we're seeing right now is extreme. Double-digit gains or losses in coins big and small are seemingly commonplace and these moves can happen with little to no news.
What I worry about is small cryptocurrencies taking the brunt of the selling as investors sell riskier positions to buy bigger names or move to cash. As that happens, we could see this selling accelerate.
Investors should focus on the underlying value and economic activity in each cryptocurrency, which will ultimately drive their value. But with all cryptocurrencies in their infancy offering utility it's hard to judge where the value lies right now. With that in mind, I'm not a big buyer today because this crash could just be getting started.