What happened
Looking at the overall price action of the crypto market today, many investors wouldn't think that there would be so many big moves. In aggregate, the entire cryptocurrency market has moved only 0.08% as of 12:25 p.m. ET today.
However, certain projects, such as The Graph (GRT 1.37%), Chiliz (CHZ +2.58%) and Lido DAO (LDO 7.30%) are having quite a day, surging 32.6%, 11.1%, and 8.8%, respectively, over the past 24 hours.
CRYPTO: GRT
Key Data Points
CRYPTO: CHZ
Key Data Points
CRYPTO: LDO
Key Data Points
Given the rather divergent price action seen in the crypto market today, it does appear investors are repricing projects according to their idiosyncratic catalysts and headwinds. Each of these three projects have their own unique catalysts today, which investors are clearly taking into consideration.
The Graph appears to be surging as a result of a recent Messari report, which highlighted that query fees on The Graph's network surged 66% over the past quarter. Additionally, expectations are that fee-related revenues could continue to climb, in part due to a surge in interest among AI-related crypto projects, which The Graph supports via its back-end infrastructure.
Chiliz is seeing incredible interest among large investors in the crypto world due to impressive updates provided by the project in recent weeks. The network's Scoville Testnet launch, which will bring about Chiliz Chain 2.0, has prompted most of the bullish sentiment around this token. The fact that nearly 10 million transactions and more than 385,000 wallets are on board with this testnet is impressive.
Finally, Lido DAO has been in the news over the past week, surging in anticipation of the upcoming Shanghai upgrade for the Ethereum network, with will allow staked Ether to be withdrawn from liquid staking protocols such as Lido.
So what
OK, so there's a lot to unpack here with respect to each of these cryptos' big moves today. It's clear that there are unique reasons investors are dividing into these tokens, and perhaps selling their other positions. In a way, I think this price action is bullish for the overall sector, as investors look to appropriately diversify into projects with real potential to create utility and steer clear of other more speculative projects.
Interestingly, I see a common theme building among these sorts of large intraday moves. Whether it's query fees surging on The Graph, more significant whale investments for Chiliz, or increased activity on Lido's network, there are fundamental drivers pushing these tokens higher. Thus, it appears investors want more clarity on the direction of specific fundamental growth drivers before putting their money to work in particular cryptos.
Now what
Overall, one might view the incredibly bearish price action in the 2022 bear market as necessary. Many projects became overvalued (or valued on sentiment rather than fundamentals), and there was probably far too much in the way of speculative excess in the markets (in terms of both leverage and capital overall). Flushing out much of that excess, and being left with projects that are trading much closer to their intrinsic values, is probably a good thing for long-term investors.
Thus, I'm not surprised to see investing activity pick up in these three projects. If the fundamental growth metrics investors are watching closely continue to improve, I think this rally could certainly have legs.
