iHodl reached out to several financial experts to find out which altcoins are worth investing in right now.
Victor Argonov, EXANTE analyst
The key factors right now that affect the crypto market are PayPal's plans to support cryptocurrencies and sell-offs in other markets amid the worsening pandemic in the days leading up to the US presidential election.
PayPal plans to provide customers with the ability to buy, sell and store four currencies in the coming weeks: bitcoin (EXANTE: Bitcoin), ethereum (ETH), bitcoin cash (BCH) and litecoin (LTC). In late October, PayPal's announcement already triggered a noticeable increase in price rates. If support really comes — the rates will further surge with a high probability.
As for the sell-off in the markets (for example, on Wednesday, October 28, the key US indices dropped by more than 3%, and oil crashed by 5%), this is an important test for cryptocurrencies for their ability to be defensive assets. In March, cryptocurrencies collapsed following the stock market, but recovered faster than that. In September, the stock market correction also pulled cryptocurrency with it, but now it is going uphill amid a negative stock trend. From the beginning of the month to October 29, the most important American S&P 500 index lost 2.5%. BTC, by contrast, gained 22%. A significant portion of the cryptocurrencies were also in positive territory. Let's list the ones that showed the best results:
- ethereum (ETH, + 8%, PayPal support). The second currency after BTC, which achieved the status of a full-fledged exchange commodity in the United States. Leading niches such as smart contracts and DeFi;
- bitcoin cash (BCH, + 16%, PayPal support). The famous bitcoin fork, which appeared in 2017 under the banner of loyalty to the ideas of Satoshi Nakamoto that all transactions should be recorded on the blockchain (this is no longer quite the case in current BTC);
- chainlink (LINK, + 15%). A network of oracles for executing smart contracts on blockchains like Ethereum. One of the clear favorites of the year, which continues to increase quotations;
- litecoin (LTC, + 20%, PayPal support). One of the first cryptocurrencies in the world to be actively traded on exchanges already in 2012-2013. Like BCH, it technically resembles BTC, which may have influenced PayPal's decision to shortlist it for supported currencies;
- monero (XMR, + 15%). The most successful anonymous currency today, interest in which is likely to grow further against the backdrop of attempts by states to control the crypto market.
Alexander Kuptsikevich, Lead Analyst at FxPro
Ethereum's (ETH) current price levels are far from the lows — since the beginning of the year ETH has risen in price by more than 200%. Nevertheless, ETH is fundamentally extremely strong and is unlikely to give up positions as we approach the launch of the second version of the blockchain, as well as the growing popularity of the DeFi sector and stablecoins. Even taking into account the impressive dynamics since the beginning of the year, ETH is 75% below historical highs, while bitcoin is only a third cheaper. The cryptocurrency community has been waiting for Ethereum 2.0 for several years, and news of this event can be announced at any time, which will eventually lead to the fact that millions of coins will be withdrawn from circulation and exchanges for staking, which cannot but affect the economy and pricing of ETH.
Next, you should pay attention to zcash (ZEC). On November 18, the coin will experience the halving. The block reward will be reduced down to 3.125 ZEC. The crypto community has been dumping the coin for a long time, then lost any interest. Right now ZEC is trading way below historical standards (99% below the peak). Whether halving will lead to a surge in volatility and an increase in the price of the coin remains to be seen, however, one should definitely not sell the coin if it is already/is still in the portfolio.
The launch of smart contracts on the Cardano blockchain (ADA) is also planned in November. The exact launch date has not been provided, but the community is expecting the event to happen in November. The coin is now at very comfortable investment levels.
Bitcoin Cash (BCH) hard fork could happen in mid-November. Disputes in the community about the future of the project have led to high-profile scandals more than once, but many made profit on it. And this time there is a chance to profit from speculation around the price and the emergence of a new chain with a similar number of coins for holders.
Dmitriy Gurkovskiy, Senior Analyst at RoboForex
All market hopes for disruptive technologies are carried over to November — Ethereum might finally launch the 2.0 network, and its competitors will present elaborated schemes for improving network scalability.
The altcoin is looking good, its main fundamental idea remains the same — the implementation of the 2.0 network, which is carried over from month to month without specifying the final dates. Nevertheless, testing is underway, and this supports the market interest in the cryptocurrency. ETH remains unambiguously attractive, and the technical picture allows us to count on its rise to $420 as soon as there is a reason for this.
XMR is on sale, but if the company succeeds in advancing the development and implementation of technologies to preserve the privacy of the network and improve its parameters, the demand for the coin may return. Now the XMR value is moving towards $110, and if the sale does not stop, in November the value of the coin may test the $100 area. From that area you can count on a rebound up to $130.
LTC in the wake of the current decline may move to $46 — the technical perspective allows us to count on this scenario. And if in this area the potential of bears is exhausted (and, most likely, this will happen), the coin will have a chance to turn to $58-60.
There is a clear sideways trend in XRP, but it may end if the company helps its coin rate by announcing new cooperation schemes. Without fundamental pillar XRP, it will be difficult to break beyond $0.2285-0.264. XRP seems to be becoming a long-term history.
Yuriy Mazur, Head of Data Analytics at CEX.IO
In November, I would suggest considering investing in chainlink, tezos (XTZ) and monero. Chainlink's downtrend, which bottomed out at $7.3 on September 23, ended, followed by a recovery rally. The LINK/USD pair has already crossed the $12 mark, which led to the release of the 20-day moving average above the 50-day one and became additional evidence of the upward dynamics in the pair. Taking into account the summer highs in the $20 area, the pair has good prospects for growth until the end of the year.
Tezos and monero show mixed dynamics, but both have good growth potential. Also, these coins have managed to firmly establish themselves in the top 20 cryptocurrencies by market cap over the past three years and will probably not collapse due to the speculative actions of individual holders of these coins.
XTZ/USD shows a strong divergence in price dynamics with BTC/USD and has been in a downward trend since August 12. Nevertheless, since September 21, the coin repeatedly dropped to the level of $2.03, but never broke below it, which is why a serious level of support was formed at this mark. Also, the 20-day and 50-day moving averages are moving closer together, and their soon crossing will provide additional technical stimulus for growth. Hence, XTZ/USD has good upside potential to $2.6 and $3.4 depending on the strength of the recovery growth.
XMR/USD recently broke the weekly resistance level of $123 for the first time since the end of July 2018, and for the period from September 1 to October 28, it shows a 34% increase with a 14.5% rise in the bitcoin price over the same period. Monero now has excellent prospects for further long-term growth, as the all-time high for this coin is at $477, and the nearest significant resistance level is at $269.5.
Igor Kuchma, TradingView Analyst
The world situation is getting worse once again amid the second wave of coronavirus. Governments have to reintroduce restrictive measures in order not to aggravate the situation. On the other hand, a return to isolation and new lockdowns will certainly lead to a weakening of consumer demand and a slowdown in economic recovery.
Due to low demand, businesses will have to face increased reserves and shrinking margins. As a result, sooner or later states will have to come to the rescue. For example, at the Russia Calling forum, Vladimir Putin said that it was proposed to extend the deferral of taxes and insurance premiums by three months for small and medium-sized businesses in the catering and services sectors. Of course, this is not enough to save the business.
According to Izvestia's research, in the event of tightening restrictions in the fight against the spread of COVID-19 in Russia and the return of a permit regime in Moscow and the regions, up to 50% of small and medium-sized businesses in Russia may go bankrupt. The situation is the same in many other countries. Even in China, the only economy where GDP is expected to grow in 2020, there are occasional protests from business owners to get help from local authorities.
In addition to the coronavirus, geopolitical instability is growing in the world. Many fear that with Biden's rise to power, taxes in the United States will rise as well, which will certainly affect the stock markets. Trump, in turn, is associated with the growth of indices.
By that yardstick, it's no surprise that BTC's dominance continues to grow. After the recent correction, the main cryptocurrency continued to rise. Ethereum is also moving in an uptrend. The rest of the altcoins, in turn, have been falling for the last two months, and no one can say with certainty when the rebound will begin.
From a fundamental point of view, coins like XRP remain attractive. The reason is very simple — the team continues to work on new projects and for this they plan to invest in MoneyTap, a blockchain payment application. In addition, according to a recent report from analyst firm Santiment, the whales have turned their eyes to the Ethereum-based LINK, REN, ELF, KNC and ZRX. Low liquidity in the market may become one of the obstacles to further growth. If negative news continues, sellers may begin to gain strength, and due to the lack of new buyers, the price of bitcoin may fall again.
Irina Jigilo, Chief Editor at cryptonisation.ru
The upcoming November will be a difficult month for all financial markets, including the cryptocurrency one. On November 3, the presidential elections in the United States will be held, and depending on their outcome the financial markets will react respectively.
A Biden win is likely to negatively affect the classic markets. His thesis on higher taxes on companies is likely to lead to lower markets. Now you can see a fairly high correlation between the American stock and cryptocurrency markets. And if the American stock market goes down, the cryptocurrency market also follows.
It should also be borne in mind that recently the cryptocurrency market has grown significantly, which means that its potential for decline is also significant. I believe that for a while it is worth refraining from investing in cryptocurrencies altogether of Biden wins.
On the contrary, some altcoins should be considered for investing in if Trump wins. But it is important to remember that from the current values there is a possibility of a bitcoin correction, which could lead to a significant collapse of altcoins. They do not feel very well even with growth.
Speaking on specific coins, then for investments it's worth considering highly liquid projects: ETH, EOS and IOTA, i.e. coins that have real products, will be interesting.
It's also worth considering cardano. During the summer, the project team carried out a number of technical improvements, which had a positive effect on the expansion of the use of the coin, and hence the strengthening of its position.
Similarly, you should consider including monero in your portfolio. In general, XMR should be given special attention as its area of application is constantly expanding. That is why the coin is surging in price, refreshing local highs and technically looking very good.
VeChain is also developing well and looks technically attractive.
However, all these altcoins should be considered only after the US elections.
Evgenii Marchenko, Financial Consultant
Bitcoin is still considered the most reliable and profitable digital currency for investments. In November, investing in it will still be profitable due to the fact that of a current steady growth, and this trend will, probably, last until the end of the year. Therefore, investing in bitcoin today, you can increase your capital in a few months.
In addition, litecoin is also a promising investment currency. Ample opportunities, a high degree of protection and almost a decade of history make it very reliable in its segment. Moreover, now the price rate has slightly decreased compared to the summer period, and as you know, investing in currencies, even electronic ones, is better on a downturn. Given the positive forecasts for LTC for the near future, it is obvious that this decline will not last long.
This article is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice.