What happened
Axie Infinity (AXS), Fantom (FTM -2.22%), and Quant (QNT -0.29%) are three promising altcoin projects many investors have on their radars. Over the past year, each of these tokens has seen massive runs, followed by downside volatility. This week, momentum continues downward for these tokens, with declines of 15.1%, 13.7%, and 10.5%, respectively, noted across Axie Infinity, Fantom, and Quant since last Friday's close, as of 12:30 p.m. ET.
Various macro concerns hit each of these cryptocurrencies, and the entire crypto market for that matter, hard over the past week. Investors continue to digest what higher interest rates could mean for capital flows into high-risk assets. Additionally, concerns around a proposed Russian crypto ban and the potential for central bank digital currencies carried over into this week.
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However, there were other drivers taking these tokens lower.
For Axie Infinity, yesterday's launch of a new RON token from Axie Infinity founder Sky Mavis went, well, poorly. This RON token is a governance token for Axie Infinity's new Ronin sidechain. However, today, this token plummeted more than 25% as of 12:30 p.m. ET. This move suggests investors may be less enticed by Axie Infinity's move to an Ethereum sidechain than previously thought.
Fantom and Quant, fast-growing altcoins powering networks supporting the growth of decentralized finance applications and interoperability, are also down double digits. Investors appear to be rotating into more stable, large-cap cryptocurrencies, given scaling concerns among other altcoins in recent weeks.
So what
This week's rather dim performance for Axie Infinity, Fantom, and Quant is noteworthy. That's because these three projects have been very attractive for growth investors in recent months. User growth in the metaverse and other high-growth networks has provided what, so far, has proven to be a very positive catalyst for investors.
However, valuations are now the topic of discussion among all investors, with rising interest rates shifting the risk paradigm in the markets. These top altcoins may still be highly regarded by those who were early adopters. However, the near-term outlook for these cryptos suggests those who bought recently may be rethinking their investment.
Now what
Whether it's profit-taking by early investors or panic-selling by recent investors, these three tokens remain under pressure. While today's price action across these tokens has been muted, the weekly moves in Axie, Fantom, and Quant were among the more bearish in the market over this time frame.
It's likely to be a token-picker's market from here. Accordingly, it will be interesting to watch whether investors pick up these tokens on this dip, or if this selling continues. For now, I will be monitoring these cryptos from the sidelines. This volatility appears likely to continue for some time.
