Why Altcoins Withered Over the Weekend

This past weekend, it seemed investors were taking a break not only from work, but from investing in the crypto market. A wide range of coins and tokens traded down over the period, not least because a key worry in the minds of many crypto investors isn't being relieved.

Across the weekend, it wasn't hard to find cryptocurrencies that were stumbling. Cardano (CRYPTO: ADA) lost nearly 4% of its value, while frequently popular meme coin Shiba Inu (CRYPTO: SHIB) wasn't a very good dog, with a more than 2% decline. It didn't seem investors were finding utility coin Litecoin (CRYPTO: LTC) to be overly useful, as it fell by almost 2%.

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Tired of tariffs

While cryptocurrency is its own unique and offbeat asset class, at the end of the day, it's an investment like anything else. That means it's subject to the broad investor sentiment that blankets all investible products (and even more so, as cryptos are volatile relative to many stocks and other securities).

Image source: Getty Images.

Just now, more than a few investors are in something of a wait-and-see mode with the Trump administration's long list of tariffs on this country's trading partners.

In the very recent past, it seemed that the tariff war might be a short and relatively inconsequential fight, as the administration began to carve out exemptions for certain products (like smartphones), and at least temporarily reduce levies on a wide range of others. Optimism was in the air that the tussle would soon be a thing of the past, or at least cool to a relatively insubstantial level.

That was then, this is now. Since that flurry of exemptions and reductions, there hasn't been much movement at all on trade. The U.S. and its partners (chiefly China, as it remains the industrial workhorse of the world that makes a great deal of products and parts) are still apparently in discussions about how to resolve tariffs to everyone's benefit.

Meanwhile, internal sniping is on the rise. Recently President Trump took U.S. companies to task for preparing their customers for anticipated price increases. In a posting on Truth Social, he took aim at one of the major names in American retail, Walmart.

The president wrote that the company "should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said 'EAT THE TARIFFS,' and not charge valued customers ANYTHING."

"I'll be watching, and so will your customers!" Trump added.

A reaction like this only heightens fears that the retail sector specifically, and our economy more broadly, is in for some pain and belt-tightening. And a slumping economy will impact most investments negatively, especially the ones quickest to react to macro catalysts -- a list that most definitely includes cryptocurrencies.

Not an excellent buying opportunity... yet

With all that being said, it's telling that the weekend crypto price slumps we saw with Cardano, Shiba Inu, Litecoin, and a host of peers weren't more pronounced. This indicates that many investors still believe that many tariff spats will be resolved positively, and before too long.

This leads to whether these dips in value make any altcoin a notable bargain. I don't feel that they do inherently, so as ever, it's wisest to be picky on the basis of fundamentals and potential. Investors are strongly recommended to keep an eye on the latest developments with trade, though, and its impact on both our and the global macroeconomy (and market sentiment).

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cardano and Walmart. The Motley Fool has a disclosure policy.