How to ‘play it safe’ with Bitcoin and Ethereum

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There have been numerous claims that Bitcoin has officially entered a bear market. This is an opinion shared by many on Crypto-Twitter, and social sentiments have also reached a new low. Now, despite the fact that the “death” of the Bitcoin market has been declared multiple times, 425 times to be exact, is this truly the case?

Shane Molidor, CEO of crypto-trading platform AscendEX, opined on the subject in a recent podcast. The executive believes that the market is not in a bear market. Instead, it has simply become quieter.

“I hesitate to say that we are in a prolonged bear market but I do think the market is quiet, we have seen a lot of retail demand subside vs. its high in February and March of this year.”

Furthermore, he claimed that referring to it as a “crypto-winter” would be an exaggeration. While Bitcoin has been in a long period of correction since May, it has remained within the $29,000-$32,000 price range. That is still a 10% increase from where the bull run started late last year.

How quiet is the market right now?

Bitcoin was valued at $9,536 exactly a year back on 24 July 2020. At the time of writing, however, BTC was trading at $32,547. That is a 300% rise in price in just one year. This reading once again highlights Bitcoin’s ability to be an investment and a long-term store of value.

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Nonetheless, there is no denying that the top digital asset has seen better days, especially after falling by half from its all-time high. This drop impacted the majority of the market’s altcoins, with some losing nearly all of their valuations.

However, the price correlation with Bitcoin caused not only the newer altcoins, but also the older ones, to fall faster than they rose. Altcoins such as Filecoin and Harmony, for example, have lost 70% and 80% of their valuations in the last three months alone. Molidor claims that

“A lot of coins that went live in early 2021 are down anywhere from 90-95% from ATHs. I think we should expect that cyclic nature to continue. Right now we are seeing a quiet period in new issuance, and new creation of these altcoin markets and I think we will see that continue to persist until Bitcoin and Ether break out of their current pricing bands.”

This in no way diminishes their value as an investment and trading tool. While most altcoins have plummeted in value over the last few months, some have made impressive gains. While many altcoins fail and fade away over time, many of them continue to be high-yielding investments.

Molidor went on to say that DeFi tokens and NFTs are making the most noise and are the most popular among speculative investors. Axie Infinity, a gaming cryptocurrency, is turning heads after rising by 130 percent in three weeks, with gains of 5000 percent expected in 2021.

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Should you be playing safe?

Rather than playing it safe by only investing in BTC and ETH, investors should consider diversifying their portfolios. This is due to the fact that altcoins can be picked up at any time based on their protocols and networks, he added.

“Broad exposure is a healthy investment strategy moving forward.”

According to the attached chart, while BTC fell by more than 32% in three months, several altcoins outperformed it significantly. Aside from Axie Infinity’s native token AXS, Polygon’s MATIC also saw a triple-digit increase of more than 150 percent. Finally, Ethereum Classic increased by nearly 50%.

With DeFi tokens and promising blockchains emerging as clear winners, we could be in for a crypto-summer that lasts all year.

 

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