Are you Ready! Altcoins season about to start?!
Altcoin season is an opportunity in the cryptocurrency markets to make massive gains. Altcoins have
done well so far in 2021 and many forecasts that the best is
yet to come! In this video, we explain why altcoins may face short term
resistance but towards the end of the year, there is a high probability that we will see
altcoins go on yet another parabolic run. It is important to understand
market cycles because to profit from altcoin season one must buy low
and sell high. This video will show you how a rare opportunity may be presenting itself
soon to get altcoins at a discount.
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Right now almost every stock is hitting all-time highs, even growth stocks that have similar
risk profiles to bitcoin. Why is the cryptocurrency market flat while
everything else rallies? Well, there are two possibilities. The first
possibility is that we are on the brink of a massive crash across the board. This would
prompt most investors to sell their riskiest assets first and that list
includes cryptocurrencies. The cause of this potential crash will likely be the
same things last time and that's the pandemic. As CNBC’s Jim Cramer pointed out, investors
are starting to get nervous about the possibility of more lockdowns
in the fall due to the spread of new variants around the world. This
is reflected in government bond yields which have been decreasing as investors pile into
bonds for safety. If a crash happens, it's possible we could enter a bear
market. The second possibility is that investors are
hesitant to buy cryptocurrencies for other reasons besides risk. After all,
they wouldn't be buying similarly risky stocks and assets if the risk was the main concern.
According to ARK Investment CEO Kathy Wood, big investors are
looking for two things in the crypto market, resiliency and
sustainability. Most of them pulled out because of China's crackdown on crypto mining in May.
You might recall that this was one of the primary causes of the
crypto crash. What comes next for the crypto market? Even
though a crash is somewhere on the horizon, I believe that we're going
to see one more massive run-up before then, and here's why. For starters, there are going
to be some seriously bullish developments for almost every major
cryptocurrency ecosystem over the next two months. Ethereum's
EIP-1559 upgrade has been confirmed for August 4th which is less than a month away. This
will see a portion of all ETH gas fees burned with the remainder going
to crypto miners. With enough transactions on the network, this could
offset ETH's inflation and turn it into a deflationary asset.
Consensus also claims that EIP-1559 will slightly reduce gas costs. Cardano could see smart
contracts roll out on its blockchain as early as August which is something
that the crypto community has been not so patiently awaiting.
Polkadot will also likely begin its parachain slot auctions in August which will enable
its smart contract functionalities. Once these upgrades go through, the demand
for the smart contract cryptocurrencies is going to go through the roof
for one reason, DeFi. The yields you can find on even the most vanilla DeFi protocols are
much higher than anything any centralized financial institution can
currently offer you. Investors big and small are feeling the squeeze from
low-interest rates and high inflation which make any yield below five to seven percent
a break-even number. This is why institutional investors have been piling
into DeFi and Kathy Wood believes this adoption was facilitated by the
crypto market crash in mid-May. This is because institutions were able to see that;e are resilient
to massive market downturns of 50 percent primarily those operating
on Ethereum; this might be why institutions have had such a
favorable view of Ethereum as of late. Whereas bitcoin is still recovering from its hash
rate collapse Ethereum's has been comparatively unaffected and its decentralized
financial ecosystem has likewise remained stable. I am sure that
institutions also like that they can have a say in Ethereum 2.0 by staking ETH which
is now available at a bank in Switzerland. Because of these and other factors
such as general user adoption, I think we may see Ethereum flip
Bitcoin by the market cap when the next bull run comes around. This is essentially guaranteed
if Ethereum sees an ETF before bitcoin and it looks like this
might just happen. Some of you might recall that VanEck filed for an Ethereum
ETF back in May this year. Later that month WisdomTree followed suit with its Ethereum
ETF. While there's been a lot of news about bitcoin
ETF decisions being delayed by the SEC, I have not seen anything
about these Ethereum ETFs. Now the SEC has 45 days to approve or reject an ETF or extend
its decision period. This
means we should have heard something about VanEck Ethereum ETF which was filed on May
7th which was 66 days ago.
If the bottom completely falls out of the crypto market, the lowest we are likely to
go is the 20k range. This is because 20k is the previous bull market high. Note
that, we could wick below 20k because of Bitcoin liquidations courtesy of
over-leveraged traders. This would correspond to a 35 to 40 drop from today's prices, given
that all coins typically shed 50 to 100 more than bitcoin during these
dips, this would correspond to a 70 to 80 dip for large and mid-cap
altcoins, likely more for small-cap altcoins. If there happens to be some black swan event
that results in a total freefall the danger zone is somewhere in the
5 to 7k range. This is because that's the price at which bitcoin mining is
no longer profitable even with a significant hash rate adjustment. The good news is that
this is a way away from current prices and would require a colossal
crash of nearly 90 percent. Obviously, this would decimate almost every
altcoin on the market. In the most extreme bull scenario, Bitcoin could
reach as high as 500k which would put its market cap on a par with gold. This is the
price point that many wealthy individuals and institutions are shooting
for though their timelines are much longer than the next five months. Unless
half the planet adopts bitcoin as legal tender during that time, there is no way that 11
trillion dollars will find its way into BTC by the end of 2021, which is the
market cap it would need to hit that price. A more realistic expectation is
the 100 to 200k range which is an easily achievable target if a Bitcoin ETF is approved in the
United States before the year's end. This would work out to a modest
4 to 6x move from current prices. Most large-cap altcoins would see
comparable gains with many mid and low caps likely doubling that. Institutions may once
again try and manipulate the top the way they did back in April and
May. This means we might not see the same blow-off top we've seen in
previous bull markets at least not for Bitcoin. These situations are improving and the return
to regular network operations seems to be happening faster for
Ethereum than Bitcoin. If resiliency, sustainability, and decentralization are truly what institutions
are looking for in cryptocurrency, then the recent regulatory
moves againstc suggests that trading volume is the final frontier. Binance
still handles most of the market activity for crypto on any given day and this is probably
what serious investors are really taking issue with progress is being
made on that front as well and most of cryptocurrency's core issues are set
to be resolved in the coming months. What do you think about investing in Altcoins
currently? Do let us know in the comments section below.
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