Black Friday was a day of "deep red" for the entire cryptocurrency market, with most of the major tokens seeing sizable sales. Tokens of Cardano (ADA), Ripple (XRP) and Avalanche (AVAX) have decreased by approximately 7%, 9% and 11%, respectively, in the previous 24 hours. Bitcoin fell by around 8%, and Ethereum's Ether token fell by around 9%.
What happened?
A new variant of the coronavirus has been discovered in South Africa, and health officials fear it appears to be highly transmissible and able to bypass current vaccines. The news of this new variant, dubbed Omicron, corresponded to sharp drops in prices for cryptocurrencies and stocks.
The S&P 500 Index ended the day down around 2,3%, while the Nasdaq Composite and Dow Jones Industrial Average fell 2,2% and 2,5%, respectively. Stocks and cryptocurrencies don't always see high levels of correlation of market movements, but this is a case where distinct markets moved in tandem.
In addition to the bearish pressure stemming from concerns over the new COVID mutation, the valuations of many cryptocurrencies have slipped due to recent regulatory developments and the perception of high risk for future crackdowns. China outlawed all cryptocurrency transactions in late September and subsequently continued to crack down on miners and others deemed to violate its digital token policies.
The infrastructure spending bill recently signed by President Biden has created new rules for cryptocurrency brokers, and it's not unreasonable to think that further national regulations and taxes may be in the works. More recently, India has introduced legislation that will effectively ban all private cryptocurrencies, triggering further sales.
The declines of the three cryptocurrencies
Despite recent sales, Avalanche's AVAX token has only dropped 3% over the past seven trading days. The cryptocurrency made big gains following news that consultancy giant Deloitte is building new disaster relief management software on the Avalanche blockchain, but its token price has retreated in response to market trends. wider.
Recently, without a major positive recent price catalyst, Ripple's XRP token has been caught up in the bearish momentum that impacted the broader cryptocurrency market and fell roughly 12,5% over the past seven days. Ripple is currently in a lawsuit with the Securities and Exchange Commission to determine whether its XRP token should be classified as a security. The lawsuit is expected to close next year, and CEO Brad Garlinghouse recently indicated that some favorable progress has been made on the case, but regulatory impacts remain a concern.
Cardano has seen a particularly steep decline in the past week of trading, with its price per token down around 15% in this stretch. Trading platform provider eToro announced on November 23 that it would restrict trading of Cardano's ADA token and TRON's TRX token due to "business considerations in the changing regulatory environment."
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