What happened

High-flying cryptocurrencies Chainlink (LINK 3.08%)Cardano (ADA 3.18%), and The Sandbox (SAND 6.48%) all saw significant declines. As of 1:15 p.m. ET, these three tokens had declined 10.5%, 9.2%, and 7.2%, respectively, over the past 24 hours.

The declines for these tokens outpaced the broader crypto market, which sank 6.5% over this same time frame.

Coins stacked up on table, with market chart overlayed in background.

Image source: Getty Images.

So what

Chainlink, Cardano, and The Sandbox are three relatively unique cryptocurrencies, with unique catalysts. Chainlink is an oracle network, focused on allowing off-chain data to be integrated with blockchain networks. Cardano is a leading proof-of-stake blockchain, seen as a competitor to mega-cap tokens Bitcoin and Ethereum. And The Sandbox is a growing metaverse blockchain, with the SAND token going on an impressive rally this year, surging more than 100-fold to its recent peak.

However, these cryptocurrencies have not been excused from the market-based sell-off that's been underway these past few weeks. As many investors may note, these three tokens have generally outperformed leading cryptocurrencies such as Bitcoin and Ethereum, posting very strong gains during previous bull market rallies. However, these seemingly higher-beta tokens have also declined much more materially during this recent downtrend. 

It appears continued concern over regulatory headwinds in the U.S. and abroad, as well as concerns around the valuations ascribed to these high-flying cryptocurrencies, are driving sentiment lower among these top tokens today.

Now what

There's not much crypto investors can do right now with respect to this price volatility in each of these tokens. Chainlink, Cardano, and The Sandbox are all tokens that long-term crypto investors may have reason to believe are solid investment opportunities. These tokens represent blockchain networks with tremendous growth potential, as the world shifts toward more decentralization.

However, the higher risk level associated with investing in digital assets can manifest itself in periods of serious selling pressure. It appears we've entered yet another market-driven sell-off that's taking no prisoners. 

Aggressive investors may consider buying the dip on these top tokens. Conservative investors may have good reason to stay on the sidelines. And the rest of us may be wondering when, if ever, sentiment in this sector will turn around. 

Again, these cryptocurrencies, and all crypto tokens for that matter, aren't investments for the faint of heart. These sustained sell-offs can test the stomach of any investor. Accordingly, investors should be willing to lose a substantial portion of their investment when trading these digital currencies.