Altcoins
Altcoin Strategy During Crypto Market Crash: Analyst Insights
Popular YouTuber and cryptocurrency analyst Michael recently posted a video in which explained the current cryptocurrency market crash and how it impacts Bitcoin and Altcoins. Michael’s remarks are intended to help investors navigate these challenging times by focusing on the need to make sound decisions and understand the markets.
The current market has been called one of the worst in the history of altcoins such as Arbitrum and Optimism. Similarly, Bitcoin has also depreciated to its lowest since October last year and is trading around $54,000.
Altcoin Performance Defy Macroeconomic Trends
Notably, this decline is not influenced by macroeconomic variables because the US dollar is depreciating and the price of gold is rising due to uncertainty in the global market. Historically, a weak dollar should be positive for Bitcoin, but the opposite is happening.
Michael also notes that U.S. Treasury yields, which are a key indicator of active and passive risk, have also fallen. This should be more favorable for Bitcoin, but the currency deviates from this pattern. He dismisses this difference as being more than just other market drivers specific to the cryptocurrency market, as opposed to general economic factors.
As Michael stated, the main cause of Bitcoin’s decline is Germany’s decision to liquidate some of its Bitcoin holdings. As a result, the market was severely panicked and pressured to sell, reducing Germany’s Bitcoin stockpile to 3.2 billion-2.3 billion. In addition, the long-awaited redemptions by the Mount Gox have started and huge amounts of Bitcoin have been sent to exchanges, which has further aggravated the market situation.
Analysts optimistic about altcoins
However, Michael does not lose hope for the best in the given situation, as the general mood is rather negative. He adds that we are probably in a similar position to the one we were in after the The FTX fiascowhich suggests that the market has reached its bottom. He says that such events occur at the beginning of a market rally and should be considered a buying opportunity by the investor.
This is Michael’s investment approach and he has stated that he is now more interested in altcoins than Bitcoin. He knows full well that the situation is unpredictable and dangerous, but he is not wavering. He tries to evaluate altcoins against Bitcoin instead of USD in his trading and the ultimate goal is to hold more Bitcoin, which he believes is the best type of money in the current environment.
For example, while his USD portfolio value has been negatively impacted, his Ethereum, which is an altcoin, has proven to be quite stable when valued against Bitcoin. This strategy shows his long-term view of the Bitcoin Value and, hence, his desire to buy more at current prices.
The analyst also emphasizes the need to choose the right altcoins. However, newer coins may have higher returns and therefore could be more profitable, but they are also risky. Michael also told investors not to panic and stick to their plans and forget about the short-term performance of the stock markets. He also focuses on the issues of conviction and allocation when it comes to trading in a highly volatile environment like the cryptocurrency market.