Why Ethereum, Dogecoin, and Solana Fell This Morning

The cryptocurrencies are falling in sympathy with Bitcoin's slide.

| More on:
People sit in rollercoaster seats with expressions of fear, terror and exhilaration as it goes into a steep downward descent representing the Novonix share price in FY22

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened?

Prices for Ethereum (CRYPTO: ETH), Dogecoin (CRYPTO: DOGE), and Solana (CRYPTO: SOL) were all tumbling Monday morning, following in the wake of Bitcoin's (CRYPTO: BTC) shift downward late last week. 

As of 11:08 a.m. ET, Ethereum was off by 2.8%, Dogecoin had lost 14.3%, and Solana had fallen 13.7%.

So what?

The cryptocurrency market has been in a freefall since Friday when Bitcoin's price fell by more than 20%. As of this writing, Bitcoin was changing hands at $48,928, down 28.5% from the all-time high of $68,493 it hit just last month. That's a fairly massive drop. 

Cryptocurrency investors may be concerned that the Federal Reserve is considering tightening its monetary policy in light of rising inflation. On top of that, both the Omicron variant and the ongoing Delta surge are boosting uncertainty about how long it will be before life will get back to something more like the pre-pandemic normal. 

Traders have generally been fleeing the tech sector as well as they look for safer places to put their money. 

There's still a fair amount of economic uncertainty right now that may be fueling investor concerns. On Friday, the U.S. reported lower job growth than expected, and over the weekend Goldman Sachs cut its 2022 U.S. gross domestic product growth forecast from 4.2% down to 3.8%. 

The prices of other cryptocurrencies often follow the movements of Bitcoin -- when the leading token tumbles, others typically follow suit. That appears to be happening Monday with the prices of Ethereum, Dogecoin, and Solana falling. 

With Monday's drop, Ethereum, Dogecoin, and Solana are down 7.8%, 33.4%, and 27.5% over the past three months, respectively. 

Now what?

By 2 p.m., Ethereum had bounced back and was up about 1% over the past 24 hours, Solana was near break-even, and Dogecoin was up about 2.9%. The coins were rising again as Bitcoin's price rose by about 0.6%. 

Cryptocurrencies are prone to volatility and the initial price drop of these coins, and subsequent rise in the afternoon, is a perfect example of that. 

Long-term investors should understand that the cryptocurrency market could experience more volatility, but it doesn't mean that these coins are a bad investment. It just means that it may be a bumpy ride on the way to bigger gains.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

More on International Stock News

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

If you invested $10,000 in Nvidia stock the day ChatGPT came out, this is how much you'd have today

Buying Nvidia when the disruptive AI chatbot launched would have been a smart move.

Read more »

A Tesla car driving along a road at sunset
International Stock News

Why Tesla stock was climbing today

Investors were encouraged by news of a price hike on the Model Y.

Read more »

Plate with coloured wedges being parcelled out like a slice of pie representing a share split
International Stock News

Stock-split watch: Is Nvidia next?

Nvidia last split its stock when it traded for a pre-split $744 in 2021.

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

1 Wall Street analyst thinks Tesla stock is going to $125. Is it a sell?

Tesla is no longer a magnificent stock, according to a Wells Fargo analyst.

Read more »

A young man goes over his finances and investment portfolio at home.
International Stock News

Is Nvidia stock a buy?

The company's stock could rise 40% over the next two years and outperform the S&P 500.

Read more »

Man with hands in the middle of two items with money bags on them.
International Stock News

Is Nvidia headed for a stock split?

Nvidia stock has split five previous times in the company's history.

Read more »

Digital rocket on a laptop.
International Stock News

Nvidia shares surged (again) today. Is it too late to buy the red-hot artificial intelligence (AI) growth stock?

Nvidia stock has gained nearly 300% over the past year. Can investors still profit from this AI stock?

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Can you buy Nvidia shares on the ASX?

This stock has rocketed higher. How do we get access to it?

Read more »