As bitcoin fell, so did other digital coins. Will tokens be able to recover or will they continue their downward movement?
On August 25, the value of some altcoins declined. For example, the price of Ethereum fell by 3%, the value of Solana token fell by 6%, and Luna token became cheaper by almost 7%. This happened against the backdrop of falling bitcoin prices. On August 25, the price of the main cryptocurrency reached $47.1 thousand, after which it returned above $48 thousand again. Experts predicted whether the decline in altcoin quotations will continue in the near term or coins will be able to restore their value.
Trend and Delay
When evaluating an altcoin portfolio, it is worth paying attention to bitcoin trends, advises Nikita Zuborev, senior analyst at Bestchange.ru. According to him, altcoins are still repeating the trends of the main cryptocurrency with some delay and high volatility.
“The growth to current levels is still within the framework of the correction of the ongoing bearish trend. It is too early to talk about a final reversal of the medium-term bearish trend. Bitcoin needs to consolidate above $50-51 thousand to speak about a global trend reversal”, the analyst explained.
An interesting fact, according to Zuborev, is the high level of “greed” in the crypto market. Over the past month the “Fear & Greed Index” rose to extreme levels, which is one of the signs of a possible correction, says the analyst. Although historically, the market may be in such a state for several months before a change of trend, he added.
In the coming weeks, you can expect a pullback of bitcoin to $44 thousand, which will provoke a correction of altcoins by 10-15%, Zuborev predicted. In his opinion, more downward movement is not expected in the short-term strategy, so such levels are likely to be a good entry point.
“The current situation includes a lot of risks, so we do not advise to open new long positions, but to hold already open ones”, the analyst recommended.
Altcoins are moving after bitcoin, so unless there is some special news from the projects (for example, from the developers of Cardano and Polkadot), nothing special will happen in the market of alternative coins, said CEO of the cryptocurrency exchange EXMO Sergey Zhdanov.
Short-term correction
There is a temporary, short-term correction in the market amid a decline in purchases of bitcoin and other top coins, said Mikhail Karkhalev, financial analyst at the crypto exchange Currency.com. He reminded that a decline in demand leads to a price correction until demand grows again.
If the goal is to buy altcoins for the long term, it can be done practically at any time, the analyst noted. But if you’re trying to make money in the short term, in this situation it’s better to wait for recovery and continued growth, believes Karkhalev.
When choosing tokens for investment, the analyst advised to pay attention to assets that have a long-term perspective. According to Karkhalev, such coins include: Uniswap, Cardano, Chainlink, Polkadot, Polygon, Chiliz and others. The likelihood of getting income from these projects over time is higher than investing in any questionable or HYIP projects, the expert explained.
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