Over the past month, the situation in the cryptocurrency market has changed. The growth of bitcoin has stopped and now the coin is trading in the same price range of $ 52-58 thousand. Altcoins continue to rise in price and renew highs. For example, Ethereum reached $ 3.5 thousand, and Binance Coin for the first time in history rose to $ 677, writes RBC Crypto.
The experts explained how the investor should behave in the current situation and what investment strategy to follow.
The conditions are dictated by the market
The current situation on the crypto market was predicted at the end of last year, says Artem Deev, head of the analytical department at AMarkets. According to him, investors are actively investing in new growing instruments, as they are looking for opportunities for profit. This leads to the fact that bitcoin slows down its growth, its market share is declining, at the same time altcoins are growing and their share has already tripled compared to the beginning of the year, the analyst noted.
The best strategy for entering the market under these conditions is to distribute your funds to different assets, since there is a risk of a sharp collapse of altcoins, and Bitcoin and Ethereum, as the leading cryptocurrencies, can go up again, explained Artem Deev. He advises to form a multicurrency basket: invest most of it in bitcoin (it will grow in the long term), less in Ethereum and altcoins.
“But it will be necessary to get out of altcoins in time, since the rapid growth will be replaced by an equally sharp fall,” the expert added.
Investment portfolio formation
During periods of uncertainty, according to Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service, it is better to buy cryptocurrency in equal portions at regular intervals. The portfolio should be well diversified, half should be in bitcoin, about 20% on Ethereum, the rest on altcoins, this will evenly distribute the risks and average the purchase price, the expert noted.
“The planning horizon is 2-3 years, I don’t recommend less. There is a high risk of not guessing at the moment for entering and exiting an asset, ”added Nikita Soshnikov.
Altcoin season
The altcoin season began almost a year ago, Artem Deev is sure. According to him, then different tokens began to grow, but later their quotes went down. It is rather difficult to guess what and how will decrease – everything now depends on the market and the demand for coins from investors, the analyst explained.
“It can be considered a signal if someone suddenly starts throwing off altcoins and the rate goes down – in such a situation it is better to immediately fix the profit and exit,” advises the head of the analytical department at AMarkets.
The altcoin season is unlikely to last more than six months, by the fall, bitcoin will enter a new phase of growth, and by this time it is better to concentrate more than half of the portfolio in the main cryptocurrency, Nikita Soshnikov believes. In his opinion, further movements in the crypto market depend on many factors: regulation of cryptocurrencies in the United States, the continuation of the influx of institutions, the macroeconomic situation in the world, even the rate of vaccination and the removal of lockdowns.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
