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During the week, bitcoin quotations fell by 18%. Altcoins also fell in price: Ethereum by 10% and BINANCE Coin by 16%. How to invest in digital coins and choose tokens to buy in this situation
Over the past week, crypto market quotations collapsed. Bitcoin has fallen in price by 18% and is trading at $38,300, according to CoinGecko. Ethereum is down 10% to $2.56k and Binance Coin is down 16% to $373. In such a situation, how to open long-term positions and what tokens to pay attention to?
The ordinary correction
The current market decline is a normal price correction, which is unlikely to lead to a global sell-off. The main factors affecting the market include the role of Ilon Musk and Tesla in the current speculation on bitcoin and the increase in sales of the coin on major cryptocurrency exchanges. These factors will continue to affect cryptocurrency prices in the near future, so the temporary decline may persist.
Earlier, Tesla CEO Elon Musk criticized the main cryptocurrency and questioned its decentralization. As an argument, Musk cited the recent situation with power outages in China, which reduced the hash rate of the main cryptocurrency's network by 35%. This sparked rumors that Tesla might start selling bitcoins. But Musk later stated that Tesla was not selling cryptocurrency.
Nevertheless, the words of Ilon Musk, most likely, will be taken into account in the further movement of quotations. Market participants managed to form some immunity from statements of media personalities, and probably will continue to hold positions, paying less attention to the talks. The real risk for crypto-assets remains the actions of the US government, and if news criticizing cryptocurrencies from, for example, US Treasury Secretary Jeannette Yellen appears again in the near future, the bitcoin exchange rate may fall to $36,000-37,000.
What tokens to buy
For bitcoin, the nearest target is $35K. Most likely, the rate will be slightly below this level, so it makes sense to go back to buy the coin no higher than $35K.
Altcoins worth looking out for are Ripple's XRP, which has benefitted from speculation about Elon Musk and bitcoin as a less "toxic" cryptocurrency. Cardano, Uniswap, XLM and XRP tokens look stable right now. Cardano's strengthening last week is due to news about improvements in the network's infrastructure. In just one week, the altcoin gained almost 30% and ranked fifth among the largest cryptocurrencies by capitalization.
Uniswap is DeFi's flagship project, which allows the coin to be stable even in times of turbulence. XRP, paradoxically, has been kept afloat by news about the litigation between Ripple (the issuer of XRP) and the U.S. Securities and Exchange Commission (SEC). Market participants have already priced in all possible negative scenarios for the coin, so it is showing a high level of resilience to the negative. XLM is a sister project to Ripple, so it is fundamentally supported by investors as a possible replacement for XRP.
