Why Shiba Inu, Cardano, and Solana Were Sinking Today

What happened

The cryptocurrency market has seen some big sell-offs corresponding with reports that Russia seems likely to begin an attack on Ukrainian territory in the near future. Solana (CRYPTO:SOL), Shiba Inu (CRYPTO:SHIB), and Cardano (CRYPTO:ADA) had fallen  4.5%, 4.8%, and 5.9%, respectively, from 4 p.m. ET Friday to 10 a.m. ET on Saturday.  

Cryptocurrencies are sometimes touted as being largely disconnected from macroeconomic and geopolitical risk factors. However, the last few months of trading seem to poke holes in that thesis. 

So what

Many of the same risk factors that have been influencing the stock market have also had a significant impact on pricing trends in the crypto space. Reports emerged Friday that Russia was likely to move forward with an attack on Ukraine, and the news spurred some strong bearish momentum for both stocks and cryptocurrencies. 

The threat of an imminent military conflict between Russia and Ukraine highlighted a significant risk factor for investors to consider. Markets had already been volatile lately, and escalating international tensions and macroeconomic concerns have had a clear impact on cryptocurrency valuations. 

Related articles

Shiba Inu Struggles To Get Consistent Gains Resulting In Investors Switching To Mpeppe (MPEPE)

30 July 2024

Key Shiba Inu Metrics Skyrocket Today: SHIB Price Rally Incoming?

30 July 2024

Friday’s worrying news on the Russia-Ukraine situation followed a report from the Labor Department on Thursday showing that consumer prices had climbed 7.5% year over year in January. Consumer-price-index inflation was up roughly 0.6% from December, and the concerning report also prompted sell-offs for many stocks and cryptocurrencies.

Now what

President Joe Biden warned Russian President Vladimir Putin in a call on Saturday that the U.S. would “impose swift and severe consequences” if an invasion of Ukraine were carried out. The tense international situation will likely continue to have a significant impact on cryptocurrencies and stocks.

While Shiba Inu, Solana, and Cardano saw big sell-offs following reports of seemingly imminent conflict escalation on Friday, it’s also worth noting that each token has stabilized somewhat in subsequent trading. In the absence of big coin-specific news hitting, trading for Solana and Cardano’s respective tokens will likely be largely shaped by momentum for the broader market in the ultra-short term. However, it looks like there could be a significant catalyst for Shiba Inu on the near horizon. 

Despite flaring international tensions and a concerning macroeconomic backdrop, the popular meme-themed cryptocurrency is up big over the last week of trading. Crypto-focused media company Bigger Entertainment recently announced it plans to burn 162 million SHIB tokens on Feb. 14, and this news has helped power big gains for the token.

ADVERTISEMENT

Burning a cryptocurrency removes tokens from circulation, thereby reducing the total outstanding count. This is often a positive value catalyst because it makes the remaining coins more scarce. 

While Bigger Entertainment’s planned token burning helped generate some media coverage and investor excitement for SHIB, the amount set to be burned represents just a small fraction of the cryptocurrency’s roughly 590 trillion coin count. The token could be primed for volatile trading leading up to, and following, the burning event. 

In general, investors should probably move forward with the understanding that the broader crypto market is poised for more volatile trading in the near term. Whether or not major cryptocurrencies will outperform stocks amid current and future market conditions remains to be seen, but it seems clear that geopolitical and macroeconomic developments are having an impact on token valuations.