In the past four weeks, the altcoin market soared by an impressive $106 billion. This boost comes as a relief to investors who’ve weathered a bumpy ride over the last twelve to eighteen months. The market’s newfound stability has stirred up mixed emotions, as traders look forward to the upcoming end-of-year rally. Historically, both Bitcoin and the altcoin market have rewarded investors in the weeks leading up to December 18.
However, this has also fueled speculation, leaving traders managing potential profits and losses amid increased market ups and downs.
Altcoins vs. Bitcoin
At present, investing in altcoins appears to offer the potential for higher returns compared to Bitcoin. This is mainly due to the diminishing returns effect. Amsterdam-based cryptocurrency analyst Michaël van de Poppe recently shared insights on Twitter, suggesting that well-positioned portfolios could yield significant gains over the next six months as altcoins experience gradual breakouts.
It’s worth noting that Poppe’s optimism about altcoins is grounded in the four-year cycle associated with Bitcoin’s halving events.
Also Read: Short-Term Altcoin Surge: What’s Driving the Market This Month?
Ethereum Sets An Example
To illustrate this potential, Poppe pointed to Ethereum (ETH), the leading smart contract and DeFi blockchain with over $23 billion in total value locked (TVL). During the 2021 bull cycle, Ethereum’s value surged an impressive 60 times.
A Note to Traders
Given this, Poppe advised traders to proceed with caution, recommending small profit-taking of 5-15 percent after a 10 percent price increase. On the flip side, when altcoins experience dips of 20-50 percent during the relief rally, Poppe suggested reallocating more funds, as these moments represent promising opportunities for traders.
What altcoins are you most bullish on right now?
