ENJ - Real-World Conflict Hits the Virtual World Metaverse Cryptocurrencies Plunge 12%
The intense fighting picking up between Russia and the Ukraine has sent shockwaves through financial markets. This real-world conflict has led to mass selling across a range of sectors many investors may think shouldn't be affected, including metaverse-related tokens. However, as of 12:30 p.m. ET, Axie Infinity (CRYPTO: AXS) , Decentraland (CRYPTO: MANA) , The Sandbox (CRYPTO: SAND) , and Enjin Coin (CRYPTO: ENJ) have plummeted 14.3%, 12.9%, 12.2%, and 16.4%, respectively, over the past 24 hours.
Notably, metaverse-related cryptos have been among the biggest winners from the fourth-quarter rally last year into anything metaverse related. This sharp increase in value has led to intense profit-taking by some investors worried about how capital flows may be disrupted by Russia's invasion of Ukraine. Indeed, this catalyst is likely to affect both equity and crypto markets further, as investors look to de-risk their portfolios.
Sentiment within the risk-on crypto sector remains on the "extreme fear" end of the spectrum, according to multifactorial market sentiment analysis for this sector. This gauge has been creeping lower in recent days, suggesting investors are more interested in minimizing risk than maximizing return. However, this gauge typically provides a good baseline for when the market is primed for buying opportunities, which may result in periodic rallies, should sentiment shift in the market in the coming weeks.
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Real-World Conflict Hits the Virtual World, Metaverse Cryptocurrencies Plunge 12%