There was once a time when the CNBC Fast Money Program had recommended their viewers to buy Litecoin at a STEEP price of $357.76. LOL.
The program had told its investors that it was a great time to buy Litecoin due to the fact that it has a technical lead over Bitcoin with faster transaction times. However, the analysts over at Fast Money failed to recognize that we were at the top of the market at that moment in time….oops….did I say failed to recognize?
I meant to say the analysts over there knew that their audience would blindly follow anything that they suggested as they know that traditional cryptocurrency investors are extremely irrational and are mainly driven by greed. Below is a screenshot of their recommendation;
Well, we all know what happens when a market tops out and starts to reverse - a whole lot of pain for the investors that had bought on the Fast Money recommendation.
You see, the media is a frenzy - the same as the majority of the investors within this game. Do you notice how there are not many buy recommendations now that the altcoin market has “collapsed”? It is because they do not want you to buy near the bottom, no, that would deliver far too much of a return on your investment. They preferably would like you to buy near the top as shown in the example above by Fast Money so even if you do make a profit, this profit will be negligible with respect to the real winners.
Here is a statement that you will never hear on these analysts shows - possibly because they are not brave enough but most likely because they do not want you to enjoy the increased rate of returns;
THIS IS LIKELY TO BE THE BEST TIME TO BUY ALTCOINS!
Let me try and explain further with a little recent example that had occurred in Bitcoin.
Looking at the chart above, we can see the extended bear trend that Bitcoin had endured during 2018. During November 2018 came another bloody capitulation period - this was the moment that most analysts believed Bitcoin was going to drop beneath $3,000 and continue further toward sub-$1000 prices. At this point in time, nobody was recommending buying Bitcoin due to the fear that it would go lower. But as 2019 started to progress, we can see Bitcoin went on an epic run that produced a return of over 130%.
Looking back in hindsight, this was the best “recent” time for you to buy Bitcoin. The time to buy is when everybody is suggesting that it is dead and will NEVER return to their previous glorious levels. This is something that is happening RIGHT NOW IN THE ALTCOIN MARKETS.
Time and time again we hear that altcoins are dead as Bitcoin continues to dominate the cryptocurrency industry. As Bitcoin has soared, investors have started to take their money out of altcoins to enjoy the Bitcoin price rise. This, in turn, even helps Bitcoin travel further higher but at the same time causes a massive crash in the altcoin industry - something that we have been living through since around March this year.
But one important thing to take away from this article is the fact that any SMART INVESTOR would now be allocating a small proportion of their Bitcoin holdings back into the altcoin market.
A Brief Overview of the Bitcoin/Altcoin Cycle
Historically, we have seen that, as Bitcoin starts to surge - money exits the altcoin industry as people start to allocate their positions in Bitcoin to enjoy the price increases. BEFORE Bitcoin tops out and starts to roll-over, the whales/large investors start to bank some of their profits made from the Bitcoin run and start to allocate it elsewhere such as altcoins (as well as buying “Lambos” - if you’re dumb enough to believe that stuff!).
What happens next is a very self-fulfilling prophecy. Once the initial Whales start to re-allocate their profits into the altcoin markets, altcoins start to rise slowly - one-by-one. Other Whales who have not re-allocated their profits just yet will see this and, believing that “history repeats itself” (which it does…), cause them to throw some of their profits into the altcoin industry. Do you see the greed at work here? As more whales enter back into altcoins the altcoin surge will have already started as the market cap of altcoins will start to increase once again as well as the altcoin dominance.
Looking at the Altcoin market cap dominance chart above, we can clearly see the stress that the altcoin market has been under since around July 2018. The stress has significantly increased during 2019 as altcoin dominance faded from above 50% to where it currently trades at around 31%. A pretty precipitous drop. We can see that we are almost approaching the levels of altcoin dominance since before Ethereum and XRP started to hit the mainstream, during the early months of 2017, which is a pretty worrying sign for any altcoin holders.
Conversely, looking at the Bitcoin dominance below, we can see quite the opposite effect. Bitcoin dominance has been soaring during 2019 and has now reached a level that is even above the level of dominance when BTC was at the ATH.
As Bitcoin has been consolidating over the past 4 weeks, the dominance has stalled around the 69% region. If Bitcoin continues to move sideways, or even falls beneath the $10K support level, we will start to see the dominance for Bitcoin to start to slip - which will be a promising signal for the altcoin industry. Furthermore, taking a look at the RSI on the weekly chart, we can see that the market is EXTREMELY overbought and has never been at this extreme overbought level. This is a good sign that the momentum for the Bitcoin dominance may start to fade which SHOULD help some money entering back into the altcoin industry.
Once further Whales start to join the party, pushing altcoin prices higher, the media will THEN catch on to the frenzy and start to hype the altcoin giants once again. This will cause the mainstream to start investing into the industry once again - causing altcoins to surge further as greed continues to play its role. However, the Whales that were in early will now start to sell to the mainstream, this is when things start to get tricky for mainstream investors. They will likely see some profit but will leave this on the table as greed encourages them to remain patient for more profit. However, more profit never comes as more and more Whales start to unwind their altcoin positions to bank some more profits.
So the winners here are the early Whales, the late Whales and those smart enough to enter the altcoin industry when nobody is talking about it - such as RIGHT NOW!
There are a plethora of “dead” altcoins you can choose from! Look into them, find something that appeals to you and allocate some of your funds to invest in it. Many prominent projects are being developed in the shadows away from the media hype and frenzy.
Coins such as IOTA, Cardano, MKR, and BAT are the types of projects I’m really into for the simple reason that they do not need to use any elaborate marketing tactics to market their project as their products speak for themselves.
Most people in the cryptocurrency industry do not know the impact that these types of projects will have - let alone the mainstream population. Once, these types of projects start to hit the mainstream press - the surge will have already started - so it is better to get in early and take the risk to benefit the great rewards. Furthermore, it is IMPERATIVE to remember that we ARE EXTREMELY EARLY still within the growth of the altcoin industry. Once these projects start to head a little further into their roadmaps we will start to see the real impact they will have on the wider mainstream world.
My Altcoin Recommendations For The Years To Come
These 4 projects are something that I am down to hold for years to come as I believe they will have a VERY strong impact on the mainstream audience. In no particular order; IOTA, ADA, MKR, and BAT.
IOTA is mainly focused on building a strong infrastructure for the Internet-of-Things which will basically allow any device to eventually have its own wallet opening up a machine-to-machine economy. From your refrigerator ordering your food to your car being able to pay automatically for toll roads, the internet-of-things will truly revolutionize the way we conduct our daily life.
IOTA is also seen as an alternative/hedge to Ethereum. We all know how powerful Ethereum is and will be with ETH 2.0 on the way. However, it is always best to hedge and IOTA is a great hedge against ETH.
Boy, do I love investing in strong projects with pancake-flat charts - IOTA is certainly one of them. We are currently trading close to the December 2018 lows which is a great entry point for any investor. If IOTA does fall beneath the 2018 low (which it shouldn’t) you can simply exit the trade with minimal losses and look for a better entry price lower.
However, looking at the other side of the trade, we have lots of room to grow into. Just to reach the 2019 highs will require a 108% price increase - which many investors should be happy about. However, I am holding out for a much larger return which is why this will be one of my long term holds. We will see strong resistance on the way up at $0.47, $0.50, $0.54 and $0.60.
Cardano is another exciting project that will have some mainstream appeal. The project is run on the philosophy that peer-reviewed code is the upmost important aspect of a cryptocurrency network and therefore the team over at Cardano are taking thing very slow but are creating some high-assurance code.
The Cardano team has a great leader behind them in Charles Hoskinson, the man who helped to co-found Ethereum, and they also have a very large reserve of funding that will allow them to continue at their own pace for a very long time without the need to rush things to create revenue - putting them in a VERY STRONG position to do things their own way.
Cardano is also in a very similar position to IOTA in the sense that we are very close to the 2018 lows - a great time to invest in a strong project with the opportunity to cut losses if the trade goes against you. A surge of 111% would only take us to the 2019 highs with the potential to reach a much higher rate of return that could extend beyond 500%+.
Maker may be a relatively unknown cryptocurrency on this list but it IS ALREADY an extremely important cornerstone to DeFi (decentralized finance). The MKR/DAI system allows users to come and put their altcoins up as collateral to receive a loan in DAI (a stable coin pegged to the US Dollar). This is changing the lending industry as we know it as it allows users to come and request loans with their collateral without the need for a finance/credit check. This opens the doors of finance to millions of unbanked and under-credited people within the world.
MKR has been trapped within a wide range between $310 and $783 this year. It is currently slap-bang in the middle of the range at this moment. MKR will be a great investment over the long term as it is required to power the entire MKR/DAI system. Once MKR breaks above the range, the growth will be unstoppable.
The last coin on this list really needs no introduction as I am sure many of you know about BAT and the Brave browser. If you do not, it is a privacy-preserving browser that is designed to change the digital advertising industry as we know it. It promises better rates of return for advertisers and also promises profits for advert viewers.
BAT has enjoyed a decent run during early 2019 but when Bitcoin started to ascend we can see that people started to exit their BAT positions. BAT is now back beneath $0.20 which is a great entry price if you believe that the Brave browser will continue to grow at the extraordinary pace set so far.
The chart above sums everything up. We are now at the tail end of the downtrend where the market will start to show the first signs of an up-tick - the beginnings of Altcoin season. Considering that many people believe that Altcoins are dead, they will not invest right now. But this is it! This is the moment for you to get in as early as possible to reap the rewards of an increased rate of return on your altcoins.
In conclusion, you want to invest in projects when the conference rooms are empty and sell when they are full. Right now, the altcoin conference rooms are totally empty - except for a few secret Whales here and there ready to move back into the market. When they are full is when the Whales have already left.
Most people will tell you NOT to buy altcoins right not - simply because of the fact that you will make some gains and they are too scared to take the plunge themselves. Generally, you should be doing the EXACT opposite to what the overall sentiment suggests. If Bitcoin is bullish, as soon as it shows weakness you need to get out. When altcoins are in the metaphorical graveyard, this is the time to start sinking funds into them to enjoy higher rates of return when the boom starts.