As euphoria surrounding Elon Musk's acquisition of Twitter begins to fade, DOGE has also plunged by 30% on a seven-day timeframe.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
The crypto markets suffered a sharp pullback in the early hours of Tuesday — dragging Bitcoin back below $20,000.
A sudden correction means BTC has now handed back all of the gains made late last week, when the world's biggest cryptocurrency surged to two-month highs of $21,466.
While Bitcoin is down 4.9% on the day at the time of writing, many altcoins are faring far worse — with Ether sliding by 5.8%.
And the reversal of fortunes has been especially calamitous for Dogecoin, which has fallen by 12.7% over the past 24 hours.
As euphoria surrounding Elon Musk's acquisition of Twitter begins to fade, DOGE has also plunged by 30% on a seven-day timeframe.
Other big losers include Solana, down 12.8% over 24 hours. And FTT, the native token of the embattled FTX exchange, is worth 22% less than it was this time on Monday.
What's Going On?
As ever in the crypto markets, it's difficult to put your finger on exactly what is causing the current downturn.
You could argue that it's linked to the recent drama surrounding FTX, which has led to a tense standoff between crypto billionaires Sam Bankman-Fried and Changpeng Zhao on Twitter.
But the slide could also be attributed to jitters surrounding the crucial midterm elections in the U.S. — with Americans going to the polls on Tuesday.
The entire U.S. House of Representatives and about a third of the Senate is up for grabs — and the Republicans are widely expected to take control of the House.
This would be a huge blow for Joe Biden in his efforts to get laws through Congress, and the results could have ramifications for the crypto sector.
Not only could it affect some of the crypto policies that Biden's administration is attempting to push through, but it may change the outcome of key votes on the future of regulation.
It could be argued that a Republican win would be a bullish development for the digital assets sector, given how many politicians within this party are vocal supporters of Bitcoin.
A big issue on the agenda concerns which agencies should be responsible for regulating crypto, how far their powers should go, and how stablecoins should be treated.
There's speculation that Rep. Patrick McHenry, who has expressed a desire to drive crypto policy forward, could end up becoming the chair of the House Financial Services Committee if a "red wave" is seen at the ballot box.
In other developments, Twitter's new owner Elon Musk has caused a stir by telling Americans who they should vote for.
"Shared power curbs the worst excesses of both parties, therefore I recommend voting for a Republican Congress, given that the Presidency is Democratic."
It's pretty unusual for the owner of an influential social network to nail their colors to the mast this way. Musk added:
"To be clear, my historical party affiliation has been independent, with an actual voting history of entirely Democrat until this year. And I'm open to the idea of voting Democrat again in the future."
