Why altcoins like Cardano and Shiba Inu are down today

Wednesday was another trading session filled with losses for all types of cryptocurrencies. Several macroeconomic news from the previous day continued to push sentiment lower, as did rising bond yields. As a result, quite a few investors were strictly in sell mode.

There were too many red numbers next to the names Alternative currenciesmajor and minor. Meme symbol Shiba Inu (Gray -2.35%) It traded down more than 4% from 1 p.m. ET until late afternoon, and Litecoin (ltc -1.57%) It sank by 3%. They were joined in the downward march by beneficial cryptocurrencies Cardano (Ada -6.31%) and Solana (Sol -1.74%)Which were trending south at rates of nearly 9% and just over 5%, respectively.

Jobs and bond yields

As usual, these coins and tokens were inspired by the perennial leader of cryptocurrencies BitcoinAnd that wasn’t a good thing. After hitting the $100,000 level last month, Bitcoin has been somewhat volatile since then. It has seen a significant rise in the past year, and like any asset that has become relatively expensive, it can be vulnerable when unfavorable news emerges.

The federal government’s Bureau of Labor Statistics on Tuesday released its job openings number for November. It stood at 8.1 million, representing a modest but notable rise from October’s figure of 7.8 million.

All things being equal, a rise in employment means increased economic activity, i.e. increased spending throughout the economy. This is positive news for any asset class, right?

Not necessarily. Cryptocurrencies are sensitive to developments in the macro economy in a somewhat counter-intuitive way. Seen by some as a hedge against the “mainstream” financial system, what is considered good for the broader economy may be seen as bad for coins and tokens.

Cryptocurrency investors are concerned that a hot economy could lead to higher inflation. As we have seen over the past few years, ballooning inflation prompts central bankers to raise interest rates in an attempt to cool things down. Higher interest rates enhance the attractiveness of securities like bonds, draining money from riskier assets like cryptocurrencies.

This seems to have started to happen since news broke of the bureau’s latest jobs data. The yield on the benchmark 10-year US Treasury note rose significantly as investors digested the numbers.

Sale signs?

I don’t feel this will lead to a sustained massive sell-off in cryptocurrencies. Demand remains strong for all types of coins and tokens, and the market as a whole feels resilient. It will take more than just an increase in job creation to put pressure on this market, and unless we get a major negative development in the near future, I don’t see it seeing a serious downturn.