Why Chainlink, Cardano, and The Sandbox Are Sinking

What happened

Three of the most-watched crypto projects, Chainlink (CRYPTO:LINK), Cardano (CRYPTO:ADA), and The Sandbox (CRYPTO:SAND), are each underperforming the market today. While cryptocurrencies overall have appreciated 0.4% over the past 24 hours, as of 11 a.m. ET these three tokens have dropped 2.5%, 3.7%, and 3.1%, respectively, over the same time frame.

Chainlink has been a poor performer of late, now down approximately 16% over the past week. As an oracle network driving interoperability solutions, Chainlink serves an important function. However, investors appear to be targeting specific projects, rather than those viewed as the “plumbing” of the crypto sector, today.

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

Similar to Chainlink, The Sandbox’s continued decline today has pushed this token more than 16% lower over the past week. Comments from Yat Siu, the founder and chairman of Animoca (the company behind The Sandbox) that companies such as Meta Platforms and Tencent could provide this space with meaningful threats appears to have some investors spooked.

So what

Undoubtedly, Chainlink, Cardano, and The Sandbox are projects with tremendous promise. All of them provide unique utility to developers and end users, and are largely viewed as tokens with excellent leverage to the growth of blockchain ecosystems around the world.

However, worries have continued across most growth-oriented asset classes today, hitting specific cryptocurrencies as well. These tokens have proven to be sensitive to monetary policy decisions in a similar way as high-growth tech stocks. With the U.S. 10-year Treasury yield surging to 1.87% this morning, investors appear to generally be taking a risk-off approach to their portfolios right now.

Now what

Whether it’s token-specific factors or macro headwinds (or both) driving these top cryptocurrencies lower today, investors have reason to take a cautious view of how specific tokens will perform in the near term. Those taking a longer-term view may be enticed to look at this sell-off as a buying opportunity. However, should this negative momentum continue, perhaps a better entry point will come on the horizon.

For now, these three tokens are on my watch list, and will be monitored moving forward.