Crypto weekend slump compounds jitters of investors already on edge
A sharp weekend crypto selloff led by a slump in smaller digital tokens set off a fresh wave of anxiety among investors, following a week in which a crackdown by the US Securities and Exchange Commission on the sector gained significant pace.
Altcoins including Cardano's ADA tumbled as much as 25% on Saturday before paring a sliver of the decline, while tokens including Solana's SOL, Polygon's MATIC and Avalanche's AVAX posted double-digit percentage drops. Bitcoin, the largest digital asset, slid about 3% as of 11 a.m. in New York. Second-ranked Ether earlier shed 5.6% to hit its lowest level since late March.
The crypto market is notorious for big swings during weekends, when activity is typically thinner and even small trades can make an impact. This time around, investors were already on edge after the SEC launched lawsuits earlier in the week against market leaders Binance Holdings Ltd. and Coinbase Global Inc., and flagged a throng of altcoins as unregistered securities, including SOL, MATIC and ADA.
Jitters were compounded by speculation over a rumor that a fund sold its entire holdings of such tokens. An image was circulated on Twitter showing a fake news article covering the liquidation, though market analysts said there was little reason to believe the rumor was true. Further speculation of selling pressure around Robinhood Markets Inc.'s decision Friday to drop certain altcoins from its platform also fed the negative sentiment.
Noelle Acheson, former head of market insights at Genesis Global Trading Inc., said there may be another cause for the price drop, such as a large holder or fund exiting its positions or an attempt to drive prices lower to cover shorts.
“Early Saturday morning UTC time is not a good time to
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