Blockchain
Why Ethereum and Solana Are Must-Buys on This Dip
Bitcoin and Ethereum have recently seen significant price drops, causing concern among investors. Bitcoin falling below $55,000 triggered major trading signals, breaking the short-term uptrend since last August. Historically, similar corrections have lasted more than two months before a bull run resumes.
VirtualBacon, Cryptocurrency Analyst points that the recent market decline is not just about the German sale of 27,000 Bitcoins, but is also intertwined with broader issues such as rate hikes, presidential election results, SEC decisions, and ETF inflows. Additionally, external factors such as The Potential Sale of Mt. Gox of 142,000 Bitcoin are creating further market pressure. While the decline may seem alarming, it is not advisable to react impulsively.
Institutions are buying the dip
Despite the decline, the good news is that important institutions such as BlackRock and Fidelity are buying the dip, signaling strong institutional confidence. The recent correction began on July 4 and will likely continue through September, aligning with historical mid-cycle corrections that last 60-70 days. Additionally, Bitcoin’s price action is often correlated with the NASDAQ and S&P 500, suggesting that as long as these indices are rising, Bitcoin will likely follow.
Venturing into Altcoins
Expanding his horizons, VirtualBacon turns his attention to altcoins, looking for hidden gems amidst the chaos. He noted that while several altcoins like Solana, Avalanche, and Polygon are expected to see a 10%-20% drawdown, strong assets like Ethereum and Solana remain viable for accumulation. According to the analyst, both assets are poised to do well, with Ethereum benefiting from upcoming ETF launches and Solana showing resilience during the recent market turmoil.
Main purchasing opportunities in various sectors
However, investors are advised to focus on proven performers and consider promising sectors such as AI, gaming, and meme coins. Due to the liquidity issue among many new tokens, the above sectors may outperform while older ones lose value. The expert said that portfolio adjustments should be made gradually over a period of 2-3 months when considering meme coins or other altcoins.
Will the bull run continue, if?
The running of the bulls is expected to resume when Bitcoin breaks above the 21-week EMA and establishes a higher low. Patience and strategic accumulation of strong assets are recommended during this period. According to the analyst, major price targets include Bitcoin at $50K, Ethereum between $2,200-$2,600, and Solana at $100-$110.
While the transfer of funds to exchanges suggests that Germany may be planning to liquidate, it does not confirm that the assets have been sold. Additionally, FTX’s bankruptcy estate is set to distribute approximately $16 billion in cash to crypto investors around September or October. This distribution is expected to act as a positive catalyst for the market in the coming months.
By supporting strategic moves, identifying key levels and exploring opportunities across different sectors, it enables investors to weather the storm and confidently capture emerging trends.
Read also: Crypto Market Overview: Bitcoin Surges Above $59K, Ethereum Surges Above $31K, While Pepe Tumbles