Since the news of the Bancor hack came out, the crypto market seems to have lost steam trading sideways for the most part of the last 48 hours. For an investor, this can be confusing on what projects to put money into at the moment.
Well, going by the behavior in the last 6 months, the market has largely been trading in the same direction as Bitcoin (BTC). Bitcoin (BTC) has become the standard for how the market moves. As such, even projects that have great news coming up, are held down by the value of bitcoin (BTC).
Therefore, for someone looking to invest in crypto for the short-term, it would be best to pivot towards bitcoin (BTC) until the market stabilizes. That’s because it offers the lowest risk level, relative to other cryptos. Its rate of decline in times of market shocks is lower as compared to altcoins. For instance, in the last 2 days, the value of bitcoin (BTC) has dropped by about 6%. Comparatively, the value of the altcoins market has dropped by over 10 – 15%. That’s why becoming a bitcoin (BTC) maximalist at this point is a sensible decision.
Diversification may be your best bet
However, for a more long-term investment, diversifying out of bitcoin into some good altcoins would be a good thing.
The reason is that in the future, some altcoins will decouple from bitcoin (BTC), and grow on the basis of their fundamentals.
The key is for investors to identify projects that have some real utility in business and have a competitive edge in their area of focus. For instance, if you are looking to invest in platform blockchains, it would be best to go for those that have fast transaction speeds, low costs, and are highly scalable.
These are the ones that stand to grow the most in this space, as more businesses look to run decentralized applications on the blockchain. On the other hand, if you are looking for cryptos that can work as currencies, it is best to go for those that have the fastest transaction speeds, low costs and are highly secure. These are the ones that stand the best chance of taking over the market in the long-run.
With these fundamentals in mind, how is Bitcoin likely to trade in the next 24 hours? To understand this, We need to look at Bitcoin’s performance in intra-day trading.
In the last 12-hours, bitcoin has been trading in a range below the 55-day moving average. Volumes too have declined slightly indicating that bitcoin (BTC) is headed for a short-term drop. A drop from its current price could see bitcoin (BTC) test $6200 in the next 24 hours.
This is a minor support level, one at which, bitcoin has held in the past. However, if it breaks above its current price, it could retest its previous high of $6700. It all depends on how volumes will move in the next few hours.