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Seasoned Trader Reveals Prime Time to Invest in Altcoins
- Recent market rallies and increased momentum in certain cryptocurrencies suggest a potential start to a bull run, but the situation remains complex and timing for investment is uncertain.
- Van de Poppe anticipates a bullish first quarter for crypto, with altcoins offering strong investment opportunities pre-halving, Ethereum gaining momentum possibly due to its own ETF approval, and a seasonal trend favouring altcoin investments.
- He recommends a cautious, fundamentally-driven investment strategy, focusing on value assessment and risk management, while being wary of trend-chasing and volatility.
Has The Bull Run Started?
We have seen the market rally over the past months, which was Bonkers, in many regards. But for most this would have been a welcomed relief from the previous 18 months which have been hard on many traders. The sentiment is also reflected in a lack of retail investors in the space which leaves many scratching their heads about what’s next for the crypto market.
While Bitcoin has been going sideways for a bit and Solana has continued its journey upwards, knocking XRP off the fifth place in terms of market cap, some altcoins have yet to bloom. So, should you dive back into the market and when exactly is the right time to buy?
Popular trader and YouTuber Michaël van de Poppe says it’s complicated – of course it is.
He said in a post on X that for most of 2022 and 2023 altcoins have suffered, but things are heating up now.
First of all, the markets have been showing a ton of momentum recently with the Injective and Solana ecosystems, additionally driven through the airdrops.
Michaël van de Poppe What’s In Store in Q1?
The founder and CEO of MN Trading believes that markets are waiting for Ethereum to take over. Here are his predictions for the next couple of months:
– In the pre-halving phase, typically between 3-8 months before the event, altcoins are notably undervalued, presenting the best investment opportunities of the cycle.
– As the approval of the Spot ETF for Bitcoin nears, it’s largely factored into its price, leading to reduced volatility. Consequently, capital tends to flow towards other cryptocurrencies, with Ethereum being the primary beneficiary after Bitcoin.
– Ethereum is also vying for its own Spot ETF approval. If granted, this would further bolster market bullishness, especially since the momentum is currently leaning towards Bitcoin due to its Spot Bitcoin ETF.
– The first quarter of the year shows a seasonal trend favouring investments in altcoins. This pattern is supported by historical data and price actions.
– At the end of the year, a notable seasonal trend emerges with investment funds and corporations rebalancing their portfolios, often selling positions for tax or risk reasons. However, this trend reverses at the start of the new year as many funds re-enter the markets with fresh allocations.
A Cautious Approach to Investing
Van de Poppe’s perspective on crypto investment is cautious yet strategic, focusing on avoiding the pitfalls of trend-chasing, which often leads to inflated prices and increased risk. Instead, he advocates for fundamental analysis, assessing each project’s inherent value and strength, rather than merely following market trends.
This way investors can follow the investment principle of maximising reward while minimising risk. Meanwhile steering clear of assets that have already experienced significant price increases to avoid entering at a peak.
His strategy of buying dips in altcoins is reasonable, but with the caveat that it requires a thorough understanding of market dynamics and individual asset performance. It’s also important to understand wise allocation and diversification to manage risk in the volatile markets ahead. Van de Poppe, while maintaining an optimistic outlook on the market’s future, balances this with a necessary caution due to the unpredictability and inherent volatility of the crypto space.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
