Crypto markets are down. But are they on sale? Dec 10, 2021
Which cryptocurrencies are on sale today for investors? This analysis post will walk you through what the Crypto-ML Market Index is telling us. We’ll discuss ADA, UNI, DOGE, and ALGO.
Markets Down! On Sale?
Bitcoin has rapidly dropped from a high of around $69,000 to where it currently stands at about $48,000. Markets are bearish but still in a fairly neutral position when we zoom out. This is a good time for investors, but it is possible prices will continue to drop from here.
If Bitcoin follows past patterns, we could see prices hit a low of $25,000. Of course, Bitcoin could begin moving back up and never drop down to those levels.
For this reason, it is best to invest on a regular basis, buying in at a variety of price points.
But you can selectively increase your investment rate based on how far down a particular asset drops.
Alright, let’s determine which cryptocurrencies are top picks right now.
If you utilize the Market Index to make an investment decision, please consider the following:
1. Due Diligence
You are selecting a cryptocurrency you believe has long-term value and is likely to increase over the course of the next couple of years. For example, you see potential in its use case, ability to grow, unique-value proposition, and the team behind it.
2. Markets Move in Cycles
While you might expect the crypto to appreciate over time due to its inherent value, you also recognize its price will rise and fall in cycles. These cycles may have nothing to do with the value of the project itself, but they do give you the opportunity to buy in at all sorts of different price points, some much better than others.
3. Regular Investing
Just like you may contribute to a 401K on a monthly basis, you are also doing the same with cryptocurrency. This means you need to make regular investing decisions. Each month, you want to select an optimal basket of cryptocurrencies to purchase.
Using the Market Index
The Market Index is designed to help you buy during the low cycles when everyone else is fearful. It uses market, exchange, search, social, and other data to evaluate the overall sentiment of each cryptocurrency (learn more about the Market Index).
Here’s a snapshot of today’s Market Index. You can see the values on the Member Dashboard.
This produces a similar view to the chart I shared above. People are neutral, bearish, and becoming fearful. But it appears we may not be at a bottom quite yet.
From this data, there are a few investment options that jump out at me:
1. ADA: Extreme Fear
Cardano‘s ADA token has dropped heavily recently. I already own some ADA and am a bit more bullish on some of its competitors. ADA is in a crowded space. This one does not pass my due diligence right now, but I will keep an eye on it.
2. DOGE: Extreme Fear
Likewise, DOGE is not one that passes my due diligence. It’s a great meme coin that may very well turn into something amazing. But I personally cannot justify investing in it.
3. UNI: Extreme Fear
Uniswap is a potential bargain as people sell out of “Extreme Fear.” Out of the three options in this state and per my due diligence, UNI has the most compelling long-term value.
I will be investing in UNI at these prices.
4. ALGO: Bearish
Algorand is not yet in “Extreme Fear,” but this project has passed my due diligence and has been on my radar to expand in my portfolio. The Market Index is saying this is moderately on sale, but that’s good enough for me.
As an added bonus, you can stake ALGO to improve your returns. While there are complex methods of staking, you can also easily stake via many exchanges, including Binance.us, Binance.com, and Coinbase. When you stake on an exchange, you typically don’t need to worry about minimum deposits or holding times. Right now, staking rewards are around 8-10%, which is fantastic.
Based on this, ALGO will be my second main investment this month.
If it drops down into “Fear” or “Extreme Fear,” I’ll revalidate my due diligence and then buy more and more aggressively.
If you want to check out staking options on exchanges:
- Coinbase Pro: referral link or direct at https://www.coinbase.com/
- Binance.com: referral link or direct at https://www.binance.com/
- Binance.us: referral link or direct at https://www.binance.us/
Hopefully this post provides you insight into how you might use the Market Index to inform your crypto investing decisions. Let us know your thoughts in the comments below.