As bitcoin declined, other digital coins also fell. Will tokens recover or will they continue their downward slide?
On August 25, the value of some altcoins declined. For example, Ethereum was down 3%, Solana was down 6%, and Luna was down almost 7%. This happened against a 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. Crypto experts have predicted whether the decline in altcoin quotations will continue in the near term or the coins will be able to recover their value.
Trend and lag
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 rise to current levels is still within the scope of a correction in an 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 has risen to an extreme level, which is one sign of a possible correction, the analyst says. While historically, the market could be in such a state for several months before a trend change, he added.
In the coming weeks, we can expect bitcoin to roll back to $44,000, which will trigger a 10-15% correction of altcoins, Zuborev predicted. In his view, no more downward movement is expected in the short-term strategy, so such levels are likely to be a good entry point.
"The current situation involves 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 (e.g. from Cardano and Polkadot developers), nothing much will happen in the alternative coins market, according to CEO of EXMO cryptocurrency exchange Sergey Zhdanov.
There is a temporary, short-term correction in the market amid a decline in purchases of bitcoin and other top coins, said financial analyst at crypto exchange Currency.com Mikhail Karkhalev. He reminded that a drop in demand leads to a price correction until demand rises again.
If the goal is to buy altcoins for the long term, it can be done practically at any time, the analyst noted. However, if you're trying to make money in the short term, in this situation, it's better to wait for recovery and continued growth, Karkhalev said.
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 dubious or HYIP projects, the expert explained.