Why Chainlink, Cardano and The Sandbox are sinking

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What happened

Three of the most watched crypto projects, Chain link (CRYPTO:LINK), gimbal (CRYPTO:ADA), and The sandbox (CRYPTO: SAND), each underperforming the market today. While cryptocurrencies have globally appreciated by 0.4% in the past 24 hours, as of 11 a.m. ET, these three tokens have fallen by 2.5%, 3.7% and 3.1% respectively during of the same period.

Chainlink has been a poor performer lately, now down around 16% over the past week. As an oracle network driving interoperability solutions, Chainlink fulfills an important function. However, investors seem to be targeting specific projects, rather than those seen as the “plumbing pipe” of the crypto industry today.

On the other hand, Cardano surged massively over the past week amid an announcement that the Cardano Forest project has successfully planted its millionth tree. However, today’s price action suggests profit taking is in order for investors as this token appreciates into one of the top five positions by market capitalization.

Similar to Chainlink, The Sandbox’s continued decline today has seen this token drop more than 16% over the past week. Comments from Yat Siu, Founder and Chairman of Animoca (the company behind The Sandbox) that companies such as Metaplatforms and Tencent could provide this space with significant threats seems to have scared off some investors.

Image source: Getty Images.

So what

Without a doubt, Chainlink, Cardano and The Sandbox are extremely promising projects. All offer unique utility to developers and end users, and are widely regarded as tokens with excellent leverage for the growth of blockchain ecosystems around the world.

However, concerns persist today across most growth-oriented asset classes, affecting specific cryptocurrencies as well. These tokens have proven to be sensitive to monetary policy decisions in the same way as high-growth tech stocks. With the 10-year US Treasury yield jumping to 1.87% this morning, investors generally seem to be taking a risk-free approach to their portfolios at the moment.

Now what

Whether it’s token-specific factors or macro headwinds (or both) driving these major cryptocurrencies down today, investors have reason to be cautious about the performance of specific tokens at short term. Those taking a longer-term view may be tempted to view this sale as a buying opportunity. However, if this negative momentum continues, perhaps a better entry point will be on the horizon.

For now, these three tokens are on my watchlist and will be monitored in the future.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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