The leading cryptocurrency, Bitcoin (BTC), is in the green again and seems to be sucking the liquidity out of alternative cryptocurrencies (altcoins). Indeed, at the time of writing, the wider cryptocurrency markets are selling off as Bitcoin climbs higher towards new all-time highs.
Can BTC maintain its momentum and is it time to buy the dip on altcoins? Let’s dive in to find out.
Are cryptos about to surge before the new year?
The crypto markets have entered a historically exciting time period as we draw closer to the final few months of the year known as Q4 by the financial world.
The table below shows the monthly returns of BTC since 2013 and as you can see, the months of October, November and December tend to be green more often than other months.
While there is no definitive explanation for this outcome, there are some who say it’s a case of a self-fulfilling prophecy and trader confirmation biases coming together.
Either way, while history doesn’t repeat itself, it often rhymes and the data so far this year suggests that we are in for a treat.
Generally speaking, as BTC rallies, traders tend to sell their altcoin positions to ride the Bitcoin wave up and whenever BTC settles, money flows back into altcoins pushing them higher.
In that sense, while altcoins may bleed in the short term, it may be a profitable idea to start buying up the dip in preparation for Bitcoin taking a break.
Looking at the chart, this may occur around $60,000 which is a psychological, round number and also $64,000 – the current all time high.
Top 5 Altcoins to look out for in 2021
Shibu Inu is up over 200% this week despite other altcoins selling off.
Since SHIB is bucking the trend in unfavourable circumstances for alts, it wouldn’t be surprising to see it rallying again after Bitcoin stabilises and interest comes back to the alt markets.
Solana has rallied significantly over the past few months and has now settled at around $150 as traders take profits and wait patiently for the next leg up.
With new NFTs coming out on the Solana blockchain on a daily basis, there is a continuous demand for the token and this should push the price higher in the months to come.
There is potential for SOL to outperform Bitcoin and Ethereum in the medium and long term as new users flock to the platform, looking for a cheap and fast way to get involved in blockchain.
The Tezos token has seen immense growth in recent months as users who were priced out by Ethereum’s expensive gas fees have flocked elsewhere to look for cheaper and faster alternatives to buy their favourite NFTs.
After peaking at around $9 per token, XTZ has now fallen below $7 and is heading towards the support level at $6.50. Should this level hold, we may see another rally after Bitcoin calms down.
Axie Infinity (AXS)
The interest in the play-to-earn blockchain gaming industry is intensifying and the AXS token has seen much of this demand.
Despite some minor retracements, things are still looking positive for this niche sector and prices should continue to rally in the weeks and months to come.
Olympus is perhaps the lesser-known crypto on our list but has been performing incredibly well nonetheless in recent months despite only being available on decentralised exchanges.
With potential for it to get added onto more popular exchanges in the future, this may be a dark horse to keep your eyes on.
All in all, the future looks very promising for crypto despite the short-term price fluctuations.
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