3 altcoins that stood strong during yesterday’s 10 percent bitcoin crash, emerged into our altcoin news today including LEO, Chainlink, and BNB.
The 3 altcoins are holding much better than other altcoins when the price of the number one cryptocurrency crashes. As analysts say, you learn much more when the market goes down than when it’s up. During yesterday’s bitcoin crash, we can learn which altcoins are staying in strong in a crypto selloff. A very small group of altcoins managed to outperform bitcoin during yesterday’s selloff. BNB, LEO and Chainlink were the ones that did it. This is the first sign that some of the altcoins are decoupling from Bitcoin in a market where everything is massively correlated.
When Bitcoin goes down, the most important thing is to watch where the traders look to put their money. Usually they look into assets that performed strongly relative to bitcoin. As analyst Rager explained:
“Altcoins that perform well during turbulent market days, when most other coins are red, are coins that I look at potentially investing.”
In a usual stock portfolio, users hedge their risks by diversifying into multiple assets. Tech stocks move into oil stocks for example. However, this does not happen in cryptocurrency. The market is correlated so even when Ethereum is serving a totally different purpose to Bitcoin, the two coins move in the same way. The crypto market is not as the traditional investments where you could diversify in order to decrease the risks and increase your portfolio chances of getting good returns. Diversifying a portfolio regarding crypto does not reduce the risks.
The one thing that BNB, LINK, and LEO have in common is the strong utility and application. BNB and LEO are native exchange tokens which means that they are highly likely to maintain demand when the traders are selling. Link made some great partnerships including the one with Google and Oracle. The performance of the asset is no longer reliant on the crypto ecosystem. As noted in the latest cryptocurrency news, there won’t be a similar season as the one in 2017. Instead, we could expect to see a selected group of high-quality altcoins that will rise up exponentially.
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We could also expect to see some of the altcoins decouple from Bitcoin and become great on their own.
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