3 Cryptos Are Hitting Recent Highs: Should You Buy?

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  • Forty-five days into 2022 and the cryptocurrency market is down more than $1 trillion in market cap, which averages out to a 30% drop per coin or token.
  • Despite that continuing downturn, three cryptos have managed gains of at least 20% over the past week, signaling outlier strength: Elrond, Shiba Inu, and XRP.

As the crypto market trades sideways, down an average of 30% so far this year, a few cryptos are bucking that downward trend.

Barely two months into 2022, the cryptocurrency industry is down more than $1 trillion in total market capitalization. That marks the second-largest dollar decline for the programmable money sector, according to Bespoke Investment Group.

While recent weeks have seen some of the larger crypto projects claw back single-digit gains, they haven't been able to overcome the 30% average loss that has occurred through the first 45 days of this year across the crypto sector.

However, three cryptos have managed gains of at least 20% over the past seven days at the time of writing.

Elrond is rising

Elrond (EGLD) is a blockchain protocol offering speedy transaction completion due in large part to a process called sharding. Shards are the smaller partitions of the Elrond network which run transactions parallel to the main blockchain. Each shard processes only a fraction of transactions off the main Elrond network, simultaneously with other shards. The shards are responsible for executing accounts, smart contracts, blockchains, etc, which plays a crucial role in enabling thousands of transactions per second.

Developers describe the Elrond blockchain as a technology ecosystem for Web3, which includes DeFi, fintech, and the internet of things. Its network has the capacity to execute an impressive 15,000 transactions per second, with virtually no latency, at a cost of less than a penny per transaction.

The blockchain has a native token known as eGold, or EGLD, that is used for paying network fees, staking, and rewarding validators. At the time of writing, EGLD is up 21.21% over the past week, at a price per coin of $194.87, a 60% decline off its peak according to CoinMarketCap. With a market capitalization of just over $4 billion it might be worth a look.

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Shiba Inu bites back

The past several days have seen Shiba Inu (SHIB) pump double digits, to 25.92% according to CoinMarketCap, on trading volume that's up 10% as of time of writing. However, nothing has changed affecting its underlying fundamentals or current technical analysis. Two possible triggers: the planned removal of more than 231 million SHIB from circulating supply today, and the possible deployment of Shiba Inu's own blockchain -- Shibarium -- which had a positive test run recently.

Those two developments are positive but don't warrant a 26% jump in seven days. Burning 231 million coins seems like a lot, but Shiba Inu has a maximum supply of 589 trillion coins. A 231-million-coin burn is inconsequential. Also, while setting up its own blockchain should reduce fees and increase speeds, Ethereum is arguably the most popular blockchain in the crypto-verse. Moving off the highly-trafficked ETH blockchain to an unproven SHIB network will lower overall volume.

Despite SHIB's recent price jump, it's still down more than 65% since it hit a record high of $ 0.00008845 in October 2021. While there may be some upside in the short term, this current price action does not seem maintainable.

XRP's price is excelling after months of stagnation

XRP (XRP) was created by Ripple to be a speedy, less costly, and more scalable alternative for both other digital assets and existing fiat payment platforms like SWIFT.

The XRP Ledger processes transactions in a few seconds, based on how quickly validator nodes come to a consensus on the transaction terms using the proof-of-stake model. However, to be a Ripple validator does not require a minimum amount of XRP to "buy-in" to the network. It does require a 24/7 broadband connection and a "Rippled Server." Current validators include financial institutions, colleges, Ripple itself, and others. As of writing, XRP is priced at $0.81 per token, with a market cap of $38 billion per CoinMarketCap.

From a technical analysis perspective, the price has rebounded off $0.75 as bullish investors strive to drive the token past the psychological barrier of $1 per token. If XRP breaks through that level and closes above it, analysts predict that it could jump as high as $1.41. Additionally, XRP is currently embroiled in a lawsuit with the U.S. Securities and Exchange Commission over whether or not it's a security. It's expected that the suit could settle later this year. A decision in XRP's favor could pump its price 300%-500%.

Remember that these observations are based on opinion and should not be considered as financial advice. It's important to always do your own research before investing any of your funds in cryptocurrency.

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