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Altcoins normally follow Bitcoin, but the most astute crypto traders can parlay BTC declines into buying opportunities.
We’ve previously stated that the relationship between Bitcoin’s price and the market capitalisation of hundreds of altcoins is illogical.
Bitcoin has little in common with Ethereum, Shiba Inu, or FTX’s native exchange token, whether you believe Bitcoin is digital gold, a payment mechanism, or both.
Big fluctuations in the price of Bitcoin define crypto markets, whether we like it or not.
Before Bitcoin fell from an all-time high above $68,000 to around $55,000 last week, pulling other altcoins down with it, the crypto market had experienced six weeks of almost continuous gain.
However, when the market turns red, as it did last week, many traders fall prey to three ancient foes: fear, uncertainty, and doubt (FUD).
As a result, we exclaim, “FUD that.” Crypto traders who have been around for a while know that periods of correction may also be profitable.
Unparalleled bull runs, lookalike corrections?
The model considers a variety of quantitative factors, including as price movement, social sentiment, and trading activity, to calculate a score that determines whether current market conditions are historically bullish, neutral, or bearish for more than 200 cryptocurrencies.
The table below illustrates ten altcoins that had a big return on investment between Nov. 11 and Nov. 18, the week in which Bitcoin fell from $68,000 to $58,000.
Six of the best crypto trading opportunities
Six out of ten of the week’s top performing assets exhibited patterns of trading and social behavior that closely resembled historically bullish combinations before they rallied.
- The Sandbox (SAND)
- Crypto.com coin (CRO)
- Voyager (VGX)
- Koinos Network (KOIN)
- TomoChain (TOMO)
- AirSwap (AST)
Given the small number of tokens that provided any gains, a score of six out of 10 is significant.
What does this mean for the nature of the bitcoin market? Altcoins can rally when the market is optimistic for a variety of reasons, the most common of which are a favourable macro environment and market enthusiasm.
However, data shows that tokens with active trading and high social sentiment are more likely to resist the trend when the market as a whole is collapsing.
These are also the times when traders require the most accurate data analytics to guide their tactics. When the floor is lava, having an extra set of analytic eyes scanning through millions of data points for potential safe havens is a big help.