Polkadot Leads Altcoin Losses After Bitcoin Is Rejected at $52K

Markets saw a pullback on Tuesday after a relatively flat weekend.

AccessTimeIconDec 28, 2021 at 11:39 a.m. UTC
Updated Dec 28, 2021 at 2:57 p.m. UTC

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Bitcoin failed to hold above $52,000 after briefly breaking through the resistance level on Monday, and slipped below $49,500 in early European trading hours on Tuesday, pulling the broader market lower.

Leading losses among the top 10 cryptocurrencies by market capitalization were Polkadot’s DOT tokens, which fell 8% in 24 hours after being a top gainer on Sunday. Others such as solana (SOL), cardano (ADA) and XRP averaged losses of 3.4%, while binance coins (BNB) gained 0.4%.

A catalyst for DOT’s upward price movement last week was the start of the second batch of parachain auctions on the Polkadot network. Parachains are distinct blockchains that run atop the main Polkadot network. Polkadot, however, has a limited number of openings available. To gain access, a parachain has to win a community-run auction that uses DOT to vote for slots, leading to increased demand for the cryptocurrency.

DOT surged to over $32 on Monday, but traders have since taken profits and the tokens exchanged hands for $28 in Asian trading hours on Tuesday. They are, however, still 20% higher than last Tuesday.

Prices slipped, falling below the 34-day moving average – a tool used to determine market trends using past prices – in Asian trading hours Tuesday. Failing to trade above the moving average indicates DOT’s decline from $54 highs in November is likely to continue.

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DOT remain in a downtrend since November 2021. (TradingView)

Other big losers among large-cap cryptocurrencies were tokens of decentralized payments network Terra (LUNA) and Ethereum scaling solution Polygon (MATIC), with both sliding 7% in the past 24 hours.

Tokens of the two surged in the past week following favorable catalysts: decentralized finance (DeFi) activity rose on Terra as crypto investors bet on the network as the next DeFi play, while the launch of top Ethereum-based exchange Uniswap on Polygon saw demand for MATIC increase.

Ethereum rivals, gaming cryptos fall

Outside of the top 20, tokens of Ethereum rival blockchains took hits. Near (NEAR) and Cosmos (ATOM) – which surged last week as traders searched for the next ecosystem that could replicate Ethereum’s success – slid 8%, while Fantom (FTM) dropped as much as 9% in the past 24 hours, data from CoinGecko showed.

Gaming-related cryptocurrencies were another losing sector. Gala (GALA) tokens declined 7%, while fan-favorites Axie Infinity (AXS) and The Sandbox (SAND) both lost 4.4% following record surges in the past few months.

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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

CoinDesk - Unknown

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.