What happened

A divergence appears to be building, at least in Monday's price action, between certain top cryptocurrencies and the broader equity market. While most risk assets declined in morning trading Monday in response to surging oil prices and an escalating conflict in the Middle East, equities recovered during the afternoon, with crypto assets underperforming.

As of 3 p.m. ET, Ethereum (ETH -0.36%)Dogecoin (DOGE -0.13%), and Bitcoin Cash (BCH -2.49%) had declined 3.3%, 3.6%, and 5.1%, respectively, over the prior 24 hours. 

So what

Ethereum's decline appeared to have been driven by more than just macroeconomic factors. News that the Ethereum Foundation (which supports development and innovation on the Ethereum blockchain) had swapped $2.7 million worth of Ethereum for stablecoin USDC (USDC -0.00%) on Monday sent the token lower. While swaps like this have been seen in the past, and are used by the Ethereum Foundation as a way to cover costs, sell-offs typically follow such transactions. This was the case once again on Monday. 

Interestingly, both Bitcoin Cash and Dogecoin appear to be increasingly seeing intraday moves that are more correlated with the overall market. Monday's outsized moves in both these tokens indicate investors may be viewing them as ways to play momentum in either direction in the crypto sector. In other words, Dogecoin's status as a meme token and Bitcoin Cash's status as a higher-volatility token could be viewed by traders as making them opportune ways to gain leverage to broader crypto market moves in the near term. 

Now what

It's rarely good news to see one of the most sophisticated developers in the crypto sector selling assets to cover its operating costs. And while that's not necessarily a novel concept for investors who follow Ethereum, the market's reaction to this sale speaks volumes about what I think could be a shifting narrative around the sustainability of this space.

For those looking at the crypto sector as a way to diversify their portfolios, investing in tokens tied to projects that continue to invest in themselves continues to be a good idea. In that regard, this move by the Ethereum Foundation may be viewed in a positive light by those who believe that most of the innovation in this sector continues to come from this blockchain.

For traders and speculators looking to play the broader moves in this sector (driven by Ethereum and Bitcoin, primarily), altcoins and higher-leverage tokens will always be around to trade. That said, if I had to pick one of these tokens to buy on Monday's decline, it would have to be Ethereum. That's partly because of the aforementioned continued reinvestment into the network's technology, as well as the fact that Ethereum has typically headed higher again in the wake of previous Ethereum Foundation sales.