These six cryptos have had a crazy journey down, but they’re getting close to the bottom.
Over the next three months, these six cryptos are anticipated to be volatile. They are, however, on the verge of a trough, having dropped by more than 60% in the previous six months. Over the following three months, investors should consider dollar-cost-averaging into them.
The fact is that the bitcoin market is in a state of collapse. The recent Federal Reserve raising of interest rates, as well as the ensuing stock market meltdown on June 10, were among the causes. That’s when the Federal Reserve raised the Fed Funds rate and began acquiring Treasury securities to tighten liquidity in the bond market. This was owing to the fact that inflation was predicted to climb in May.
Another reason for this is that a second Defi (Decentralized finance) liquidity pool has started “halting” withdrawals. Babel, a Hong Kong lending platform, took action to halt redemptions and withdrawals.
This has exacerbated investor concern, and many have been forced to “liquidate” their other significant cryptocurrency assets.
Of course, it pays to gently accumulate during panics like these when you believe an asset has reached a bottom, even if additional drops are likely. There’s no certainty this will happen. That’s where we’re at right now.
Bitcoin (BTC-USD)
Bitcoin (BTC-USD) is the world’s largest cryptocurrency and the first decentralized digital money. According to Coinmarketcap.com, there are 21 million Bitcoin tokens in circulation, with over 19 million of them having been produced.
This means that 9.5 percent of the token supply can be produced at a higher hash rate, or difficulty rate, for Bitcoin miners. As a result, the crypto might end up going higher over the following few years as the scarcity impact on supply kicks in.
Bitcoin, the most valuable cryptocurrency, is down 60% year to far, from $47,686.81 at the end of 2021 to $18,998 as of June 18. Furthermore, since its peak of $76,566 on November 7, the cryptocurrency has lost more than 75% of its value.
Ethereum (ETH-USD)
One investor has compared the bitcoin selloff to the Panic of 1907. Back then, there was no Federal Reserve. “JP Morgan was compelled to step in with his own cash and then gather all those men who were solvent to rectify the issue,” according to the article.
Investors will surge back into cryptos until they perceive a large downdraft in the market for Bitcoin and/or Ethereum. This hasn’t occurred yet, and I don’t think it will until Ethereum falls below $1,000.
Ethereum is the second-largest cryptocurrency, and it is nearing the point when it will switch from proof-of-work to proof-of-stake (crypto mining). Ethereum is down 73.6 percent YTD and over 80% from its record of $4,812 on Nov. 7 at $995 on June 18.
This elevates it to a level of rarity. It’s hard to say how long Ethereum will stay below $1,000, as it appears to be a huge red line. I don’t think Ethereum will be able to stay below $1,000 for long. As long as the price is below $1,000, this is an excellent time to begin dollar-cost averaging into it.
Cardano (ADA-USD)
Cardano (ADA-USD) is a cryptocurrency that competes directly with Ethereum. It claims that their platform is more scalable, secure, and efficient than competitors’. In the past year, it has accepted smart contracts and NFTs (non-fungible tokens) on its platform.
The jury is still out on whether it will be able to overcome Ethereum. Despite the fact that its transaction validation technology is based on proof-of-stake rather than mining like Bitcoin and Ethereum, it is expected to convert in the near future. One of its benefits may be lost as a result.
Cardano is expected to make a huge recovery. Cardano is expected to make a huge comeback given that it is gaining traction in the smart contract and NFT (non-fungible tokens) markets. As of June 18, Cardano was down 67 percent year to date.
Solana (SOL-USD)
Solana is an Ethereum-based blockchain that aims to make transactions and validations as quick as possible. It also promises to have the lowest transaction fees, albeit smart contract transactions are still charged for. These are utilized in banking applications as well as other applications like as music streaming.
So far this year, it has suffered a significant knock. On June 18, it was $30.88, down 82.7 percent from $178.52 at the end of the previous year. Worse, it’s down 88.1 percent from its all-time high of $258.93 on November 7, 2021.
This is a difficult show to watch. However, this could be a good time to start dollar-cost-averaging into crypto. It may fall more, but there will be no time to buy at current levels if the market attitude changes. Living with uncertainty for the next three months or so may pay off handsomely in the end.
Even if it retraced half of its $228 drop from its top, the climb to $144.91 from $30.88 is a gain of nearly 369 percent.
Dogecoin (DOGE-USD)
Dogecoin (DOGE-USD) is gaining traction as a payment method among shops, especially now that Elon Musk continues to support Dogecoin as a payment method. Dogecoin is down 69 percent year to date, from 17.3 cents at the end of 2021 to 5.3 cents on June 13.
Furthermore, Dogecoin is presently down over 84.5 percent from its high of 34.14 cents on August 14, 2021. It’s remarkable that Dogecoin has plummeted so far in such a short amount of time. When the market recovers, however, there will be no opportunity to get in at current levels. That’s why it’s a good idea to factor in the price over the following three months.
Polygon (MATIC-USD)
Polygon is a Layer 2 protocol cryptocurrency based on Ethereum. “It allows developers to design and deploy their own blockchains that are compatible with the Ethereum blockchain with a single click,” according to Coindesk.
It has dropped 86.5 percent YTD to 34.7 cents from $2.5748 at the end of previous year as of June 18. MATIC crypto will generate a 400 percent return even if it retraces half of the loss to $1.73.
That’s motivation enough for investors to start a dollar-cost-average campaign in the coming three months. This will allow them to profit from any cryptocurrency bounce, which is expected to occur fast once it begins. It’s also a disciplined approach to investing, allowing the investor to calmly ride out any market turbulence.