Crypto Market Tanks, Bargain Hunting Begins
Today we review what might be expected for the crypto market in the near future (spoiler alert: we think a big turnaround is just ahead), and offer up some recommendations for fundamentally-sound coins that could currently be at bottom-dollar, bargain store prices.
Crypto Market Tanks, Bargain Coin Hunting Begins
It was indeed a rough week for almost the entirety of the crypto market, as prices extended their decline and bearish momentum continued to build. As of early Monday morning, the price of Bitcoin (BTC) sank an additional 20% over the last 7 days, extended monthly losses to 31%. All top coins fared just as poorly, with only a lucky handful in the top 100 by market cap posting gains for the week. In all, the total market cap of all coins shed a whopping $50 billion in value and has retraced to levels not seen since early May.
While we may have a while to go before the bottom is finally reached, it’s hard to imagine that things will get much worse from here. Baron Rothschild, an 18th century British nobleman, acquired a fortune by perfecting what is now known as the art of contrarian investing, meaning that the best deals are to be found when the market expects the exact opposite to occur. Rothschild, a member of the famous Rothschild banking family, is credited with the famous saying, “Buy when there’s blood in the streets, even if the blood is your own.”
Is the Halving Priced In Yet? Sort of.
So, is there currently blood in the crypto market streets? There certainly is a lot of panic and dismay as things haven’t been working out as planned for those expecting a continued rise thanks to the approaching bitcoin reward halving, in which the block reward for mining BTC will be halved from 12.5 to 6.25 BTC. This event has traditionally been preceded by a large gain in price that helps to offset the loss of miner reward in terms of dollars. While this hasn’t exactly played out in the manner which traders counting on the halving phenomenon had hoped, BTC has still fared pretty decently for the year.
To put things in perspective, today’s price of BTC is still up 67.5% of what it was exactly one year ago. Granted, this time last year, the markets were at crushing depths fueled by the great Bitcoin Cash Civil War in which both Bitcoin SV (BSV) and Bitcoin Cash ABC (BCH) were dumping huge stashes of BTC in order to pay for rented hash power used to bolster control over the BCH ticker. We all know how the story ended: ABC was victorious and SV shuffled off to its own blockchain where it currently lives. The war had brought great devastation to the morale of the entire crypto market, and BTC saw a low of about $3260 in December as an indirect result of it.
A Tale of Two Charts
No doubt the last few months have been unexpectedly bearish for bitcoin, as the price has only wobbled its way downward after reaching an astounding high of around $13k back in July. However, when looking at price channels between lows and highs attained since July, BTC seems to be toward the low edge of the channel, which suggests a rise is imminent.
When the long-term perspective is considered, a chart demonstrating a logarithmic scale-based high and low channel back to 2015 seems to suggest pretty much the same phenomenon: the current price seems to be at the low edge of the channel, even though the channel is ascending as opposed to descending. This type of channel suggests the BTC may be due for an imminent bounce as well.
So while market sentiment may be negative for cryptocurrency in general, and a contrarian investor might start thinking this is a good time to start buying, it is a good thing to remember that this is crypto and anything could happen. The price of BTC could see a retracement of down to $5200, one of its last major support levels, if it fails to hold its current ground of $6600 – $6800. In the case that the channels in both charts shown above are correct, and BTC doesn’t fall any further, now would be the perfect time to start bargain hunting for coins that are massively oversold (BTC included). Indeed, short positions have already begun liquidation en masse over the last couple hours, which is usually a good sign that things may be headed back up.
In the remainder of this article, we will be reviewing a few coins that we consider to be potentially at bargain prices at the moment, as well as some coins that continued to do well in spite of the overwhelmingly bearish price action, and one coin that saw a jaw-dropping 8,000+% (!) gain.
Best Bargain Coins in the Top 100
With the exception of Ripple (XRP), which is barely hanging under a 20% loss, and of course Tether (USDT), all coins in the top 10 are down over 20% for the week. As a matter of fact, 60 of the top 100 coins by market cap are down over 20%, so we will be presenting only coins that have a combination of being down 20+% in the last week and have what we consider to be solid fundamentals that could inspire the resumption of their upward progress. These coins are considered to be at a discount and likely worth purchasing at current prices as at least medium-term investments:
- Bitcoin (BTC) (-20.83%) – This one should come as no surprise, and should be bought for the combination of technical factors that have emerged recently and the fundamental factors that have supported its continued dominance through the entirety of its existence.
- NEO (NEO) (-26.29%) – NEO came on to the scene as a Chinese-friendly Ethereum, which posed an intrinsic problem as China had long banned ICOs and related activities from being conducted within their borders. Government sentiments on this matter have begin shifting as of very recently, however, with NEO being one of the coins to get a boost after China’s announcement of plans to regulate use of blockchain-related products in late October. At under $10 a coin, this could be a potential steal.
- Waves (WAVES) (-27.74%) – Waves is a platform-based coin that has made token creation even easier than Ethereum, and unlike Ethereum, it doesn’t have a huge amount of bloat associated with its blockchain. What it does have, however, is a built-in DEX that is hosting an increasing amount of successful tokens. Thanks to Waves’ “portal” technology, a wide variety of other coins and even fiat currencies can be successfully exchanged for WAVES or platform-based tokens. We feel that Waves has been particularly oversold through the second half of the year and could potentially be seen as an alternative to Ethereum should it continue to face problems associated with scaling (or lack thereof).
- Binance Coin (BNB) (-26.56%) – King of the altcoin exchange industry is Binance, and king of the exchange-based utility tokens is BNB. It has fallen over 50% since reaching all-time highs in July, which is a symptom of the underlying market. Though it occasionally has its own troubles, Binance is a class-act operation that is geared for years more of success to follow, and this includes finding ways to keep the price of its utility token (as close a thing to a stock in Binance as the public can own) on the rise.
Here are a couple of coins that have managed to do comparatively well over the last few months, and especially in the face of an overwhelmingly bearish market:
- Matic Network (MATIC) (+28.78%) – Launched in April 2019, MATIC has been chugging along in the charts, cracking the top 100 for the first time earlier this month, climbing almost 30% in the time when most other coins are down 20%. It bills itself as a Layer 2 scaling solution that combines the best parts of Bitcoin and Ethereum, being interoperable with both chains. MATIC is still only at a little more than half the price of its all-time high set back in May, but great things are expected in its future, especially given its recent, steady performance.
- Augur (REP) (-11.20%) – Launched in 2015, Augur is famous for being one of the very first Ethereum-based projects. It has been slow-and-steady in its mission to build a first-of-its-kind “prediction market.” Long in beta production, Augur has slowly been rolling its way out toward a fully-tested working product launch, driven by a combination of harnessing “wisdom of the crowd” mentality with the latest in software-driven developments in AI.
Finally, here’s something that you don’t see every day: a coin up 8,475% in one week! This type of thing might have been more commonplace during the birth of the altcoin scene, but we sure haven’t seen it happen in quite a while:
- Storeum (STO) (+8475%) – Up over 280% in the last 24 hours alone, and being solely responsible for the top 100 coins to have a net positive average across the week, is Storeum, which describes itself as being a decentralized marketplace which allows users to buy and sell products and services using a variety of cryptocurrencies. 99.9% of STO’s $32k in trading volume comes from one little known exchange called ExtStock. With such a tiny trading volume compared to other coins the size of its market cap, Storeum’s “success” can only be due to one thing: manipulation. They have thus far managed to slip CoinMarketCap’s oversight, as in no rational world should a market cap of $70 million be supported by a trading volume of only $32,000, especially when the other 2 exchanges trading the coin have its price as less than 1/100th of its price on ExtStock. Long story short: this coin should be avoided at all costs.