The cryptocurrency market is well on its way to ending with a day of sell-offs in 2021. Aave‘S (CRYPTO: AAVE) Token pulledback, losing about 3.6% in the last 24 hours of trading at 4:00 p.m. ET, but there have been a handful of application-enabled cryptocurrencies that manage to weather declining pressures.
While their gains were relatively small compared to days of even bigger movements, Arweave‘S (CRYPTO: AR) AR tokens and cosmos‘ (CRYPTO: ATOM) ATOM tokens are among the top performing large cryptocurrency tokens on the last day of trading. Arweave’s token has increased by around 4.2% in the last 24 hours of trading, while Cosmos’s token has increased by around 2.5% over the entire route.
After months of outstanding price gains, most cryptocurrencies experienced bearish volatility in December. There doesn’t appear to have been anything material to fuel the December 31st cryptocurrency valuation decline, but investors have generally taken a more cautious stance on risky games.
The Aave token is just one of many victims in the year-end pullback on Friday with market-leading crypto tokens Bitcoin and ether also down about 2.7% and 1.9%, respectively, at the time of this writing. The Aave token is now down about 9.5% in the last seven days of trading, while Arweave’s AR token is down about 1.7% over time.
While most cryptocurrencies have seen significant sell-offs in the past seven days, Cosmos’ ATOM token is a notable exception. The ATOM token is up about 9.4% over the past week and appears to be attracting attention as investors look for networks that can power the entire blockchain, decentralized finance, and cryptocurrency spaces.
Cosmos’ ATOM token has risen about 400% over the past year of trading. Cosmos offers services that help bridge data between separate blockchains, which could prove very valuable and help increase the price of its token as the markets for cryptocurrencies and blockchain services evolve. New blockchain and cryptocurrency projects seem to be popping up every day, but most of these ecosystems are isolated from other networks.
As the market for blockchain services continues to evolve and attract the attention of businesses and individual users, the demand for interoperability between networks is likely to increase. Cosmos isn’t alone in providing these types of functionality, but it’s showing signs of impressive adoption and now has 262 apps and services using its network.
In the context of historical trends, investors shouldn’t read too much into today’s moves in the cryptocurrency space. The broader crypto market is predisposed to high volatility, and it is not uncommon for tokens to see even bigger moves even when there is no news propelling the price action. While today’s sell-offs for top cryptocurrencies may not reveal much to investors about the overall outlook for digital tokens, the fact that Arweave and Cosmos have made significant profits could be a sign that there is support behind these networks and their respective tokens builds up.
Crypto investors should likely move forward with the expectation that digital token pricing will again be very volatile in 2022. The overall rating for cryptocurrencies roughly tripled during trading in 2021, raising high expectations this year. While it is possible that some cryptocurrencies will again see stellar profits thanks to the strength of their underlying applications and services, or due to the ongoing speculative momentum, the risk profile in this area appears to have increased. After such a stellar performance in 2021, there is a lot to prove in the New Year and investors may want to be selective about which crypto tokens to put their money on.
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