Cardano (ADA) and Shiba INU(SHIB) are two very different cryptocurrencies that have gained fame for different reasons. However, there seems to be one common thing between these two coins in the last few days – a downward plunge. 

So, what’s going on with these popular altcoins and why are they losing value? This is something that has traders scratching their heads. So, let’s examine the reasons why these two well-performing cryptos are suddenly losing value in recent days. 

Cardano’s Specific Challenges

Scalability and security – these are the two things that Cardano is known for. However, it has hit some snags. While it has superior technology and an active development community backing it, Cardano has still struggled with adoption. Its position in real-world use cases has not improved too. All these problems became worse with the recent market downturn, which caused ADA’s value to drop. 

Also, Cardano investors are frustrated with the very ambitious roadmap and the slow release of important features. Even though nobody doubts the platform’s potential in the long term, the short-term market feelings have not been kind. Because of this, ADA has been affected by the larger market sell-off.

Cardano Price Performance: 

•  January 7, 2025: $0.992 (down 8.97% in the last 24 hours)

•  January 6, 2025: $1.0941

•  January 5, 2025: $1.0935

Shiba Inu’s Volatility

Known as the “Dogecoin killer” Shiba Inu has achieved a lot as its time as a meme token. However, like a meme coin, its value is highly speculative and driven by social media hype. The inherent volatility of meme coins such as these have been recently highlighted by the recent market downturn. In other words, meme tokens like Shiba Inu are the first to feel the impact in such situations. 

Shiba Inu has big supply in circulation and not much utility. Because of this, it is more likely to have big price changes. Even though the community behind it is very active and passionate, it does not affect the value much. Instead, the price is mostly influenced by market speculation and people’s feelings.

Shiba Inu’s Price Performance: 

•  January 7, 2025: $0.00002241 (down 7.33% in the last 24 hours)

•  January 6, 2025: $0.00002404

•  January 5, 2025: $0.00002406

Macroeconomic Factors Play a Role

The broader macroeconomic environment is the prime suspect to be blamed for the recent dip in Cardano and Shiba Inu’s value. An interesting stat put forward is the latest jobs data from the U.S. government. It showed an increase in job openings, which almost always has a negative impact on the crypto market. 

Why? – because higher job openings are a sign of a strong economy. This can lead to increased inflation concerns. 

So, if we think in terms of inflation control, central banks across the globe almost alwaysincrease interest rates to bring down inflation. Now, that’s why yields make bonds the safer asset to go for, compared to cryptocurrencies. 

The rise in Bond Yields

Numerous media sources have reported the rise of the yield for the benchmark 10-year U.S. Treasury note. This can make cryptocurrencies less attractive to investors who would otherwise go for them. In such situations, they tend to focus more on bonds, which become the safer and more stable alternative. When this happens, we almost always see a massive sell-off in the crypto market, dragging their prices down. 

The Influence of Bitcoin

Like it or not, Bitcoin sets the tone of the entire market. After BTC reached $100,000 last month, it has experienced some turbulence. A slight wobble in Bitcoin can drag other cryptocurrencies with it, including Cardano and Shiba Inu. The recent volatility in BTC’s price can be a contributing factor to the decrease of Cardano and Shina Inu. 

Market Sentiment and Speculation

It goes without saying that crypto as an asset class are highly sensitive to speculation and market sentiment. One piece of bad news, any regulatory worries or in some cases just rumours and gossips could kick-start panic selling. 

When it comes to Cardano and Shiba Inu, a combination of market sentiment and macroeconomic factors has created the perfect storm. This led to their overall decline. 

How Can Solus Finance Help? 

When trading in such a turbulent market, traders should always use reliable platform which provide advanced tools and strategies. Luckily, Solus Finance fulfils all these criteria. This innovative platform provides the most user-friendly place for traders to deal with crypto through strike options and perpetual futures. 

Two of Solus Finance’s products, crypto strike options and perpetual futures are regarded as breakthrough financial instruments. They allow traders to hedge their positions and manage their risk effectively.  Using Solus Finance as a trading platform is one of the best things a trader can do to diversify their strategies while protecting their investments. 

Conclusion

At present, Shiba Inu and Cardano are looking bleak from the market perspective. Remember though, it is important to be rational as alt coins are not always shiny. The reasons mentioned above are behind these plummeting alt coins. But always remember, the crypto market is like a rollercoaster, and the long-term potential is still good, even if there are some drops along the way.