Polkadot, Solana, Terra, Lead Large-Cap Losses Amid Broader Market Drop

Cryptocurrencies fall heading into the weekend following a global sell-off in risk assets.

AccessTimeIconDec 10, 2021 at 9:32 a.m. UTC
Updated May 11, 2023 at 6:59 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The native tokens of layer 1 blockchains Polkadot, Solana and Terra were among the biggest losers Friday morning amid a fall in the broader cryptocurrency market, data from multiple sources shows.

Polkadot (DOT) was trading at $27 during Asian trading hours, down 7% from Thursday’s peak of $30.16. Solana (SOL) fell 6.6% to $178, while terra (LUNA) traded at $69.43, down 8% from Thursday’s $76.72 high.

The solana price drop was partly driven by a congestion problem on the Solana network on Thursday that caused its transaction-processing speed to slow down, CoinDesk reported.

Some expect solana’s decline to continue until a major support level is reached. “SOL/USD is heading toward the $145 daily support level,” said Phil Gunwhy, chief marketing officer at Solana-based lending platform Blockasset. “There is not much substantial support along the way until that mark, only the $155.5 daily level which does not look overly convincing in terms of its potential motive force.”

Meanwhile, fundamentals remain strong for large-cap altcoins polkadot and terra, which is the native token of the Luna network. Polkadot’s much-awaited “parachain” feature went live last month, allowing investors and the community to lock up DOT tokens in an auction for the tokens of other blockchains that build atop the main Polkadot blockchain.

As for Luna, according to data from tracking tool DeFi Llama, decentralized finance (DeFi) apps have locked up over $13 billion worth of LUNA and other Terra-based assets like UST on the Luna blockchain. The tokens’ fundamentals were further strengthened by a token-burning mechanism that went live in November.

Meme coins see smaller declines than layer 1 blockchains

Meme coins like dogecoin and shiba inu saw relatively smaller declines. Dogecoin fell 3.7% and shiba inu dropped 4%. Meanwhile, coins associated with Ethereum competitors Algorand and Cardano fell 4.8% and 6.2% respectively. Avalanche, the token for another layer 1 network, fell 3.4% at press time.

The tokens of popular Ethereum mainstays like decentralized exchange Uniswap (UNI) and metaverse game Axie Infinity (AXS) were among the other big losers during Asian trading hours, dropping as much 9% from Thursday highs.

The declines were primarily technically driven and followed those of bitcoin, the world’s largest cryptocurrency by market capitalization, which fell to a low of $47,440 from Thursday’s high of $50,910.

Global risk assets like bitcoin declined on Thursday morning shortly after rating agency Fitch downgraded Evergrande, a Chinese real estate conglomerate with an estimated $300 billion in obligations. Fitch said Evergrande had defaulted and wouldn’t repay its investors, sparking fears of an imminent sell-off in other markets.

Market sentiments were also dented by inflation fears, with the U.S. Federal Reserve’s plans to wind down its bond-purchase program, and by the spread of the Omicron coronavirus.


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.