Statements by Chairman Xi Jinping were a major catalyst for renewed interest in Chinese cryptocurrencies. Cryptos such as TRON, NEO, and Ontology demonstrated strong 7-day returns following Xi’s comments, but this newfound momentum appears unsustainable.
The Chairman’s statements on blockchain were the initial spark that drove renewed interest in Chinese crypto projects. Other developments from China proceeded to maintain the momentum: progress on its digital currency, cryptocurrency education, and increasing interest in investing in blockchain technology. As sentiment in China improved, prices for Chinese-based blockchain projects surged.
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As evidenced by the chart, the Return On Investment for all the projects under consideration was higher than Bitcoin’s. Bytom had by far the best return, but projects like Ontology, NEO, and IOST beat BTC by 25% or more.
However, new money appears unconvinced by the Chinese narrative. Recent price growth from Xi’s statements look unsustainable. The initial hype that propelled the projects is dying down. Even though they resumed climbing after a recent retracement, the rest of the market seems exhausted — evidenced by Bitcoin’s price action.
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Bitcoin’s three-day ROI is close to zero and even projects such as TRON are seeing signs of exhaustion.
In the absence of a China-related catalyst that would re-ignite retail excitement, a continuation of the previous trend is unlikely. Considering the gains that the Chinese projects already enjoyed, a pull-back seems like a strong possibility.
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