Crypto analyst VirtualBacon highlights that the recent market dip isn’t just due to Germany selling 27,000 Bitcoins. It’s also intertwined with broader issues like rate hikes, presidential election results, SEC decisions, and ETF inflows. External factors, such as Mt. Gox’s potential sale of 142,000 Bitcoins, are adding to market pressures.
Despite the alarming drop, he advises against knee-jerk reactions.
Institutions are Buying the Dip!
Despite the decline, major institutions such as BlackRock and Fidelity are buying the dip, signaling strong institutional confidence. The recent correction began on July 4th and is expected to continue until September, aligning with historical mid-cycle corrections that last 60-70 days. Additionally, Bitcoin’s price action often correlates with the NASDAQ and S&P 500, suggesting that as long as these indices rise, Bitcoin will likely follow suit.
Hunting for the Gems
Expanding his horizons, VirtualBacon is scouting altcoins for hidden gems amidst the chaos. He notes that while several altcoins like Solana, Avalanche, and Polygon are expected to see a 10%-20% drawdown, strong assets like Ethereum and Solana remain worthwhile for accumulation.
According to the analyst, both assets are poised for success, with Ethereum benefiting from upcoming ETF launches and Solana showing resilience during recent market turbulence.
Strategic Adjustments for the Future
Investors are advised to focus on proven performers and consider promising sectors like AI, gaming, and meme coins. Due to liquidity issues among many new tokens, these sectors may outperform as older ones lose value. The expert suggests that portfolio adjustments should be made gradually over 2-3 months if considering meme coins or other altcoins.
