A senior analyst at Token Metrics shares his 2 favorite altcoin projects that could rise if the crypto market weakens, and explains what to do if Bitcoin (BTC) drops to $20,000 in a ‘worst case scenario’.
Analyst believes the drop will be a buying opportunity in the long run
Bitcoin is currently changing hands for around $39,874. This is almost exactly halfway between 2022 high ($47,938) and year low ($33,503). With Bitcoin prices falling dramatically last year, no one knows which of these levels the world’s largest digital asset will retest first. This includes proven crypto forecasters like Bill Noble, a senior market analyst at Token Metrics.
Bitcoin embarks on a rollercoaster ride in 2022 After carefully analyzing the crypto market charts and catalysts, Bill Noble noted that Bitcoin’s current bull and bear at $56,000 and $28,000 respectively He says he’s in the middle between price targets.
In the upside scenario, Bitcoin dispels concerns about rising interest rates, which broke investor sentiment and climbed to $56,000 before the end of the year. Then, sometime in 2023, the token finally makes it past the much anticipated milestone of $100,000.
Bill Noble, Token Metrics Analyst, “I think crypto will emerge in 2023 as the ultimate financial investment for the future, once the global financial backlash is over.” In the less rosy scenario, Nobel notes that the war in Ukraine, 41 years of high inflation, and a policy mistake by central banks have put cryptocurrencies under even more pressure.
Ultimately, however, Noble believes that even this stressful outcome will be a long-term buying opportunity. According to the analyst, the crypto could drop and then there are loads of people out there waiting to buy it.
How to prepare for the ‘worst case scenario’ for Bitcoin?
While the analyst says that $28,000 is a ‘more likely level’ for Bitcoin to bottom out if there is a downturn, he adds that the ‘worst case scenario’ for the token is $20,000. In the meantime, let us remind you that Bitcoin has not fallen below $30,000 since January 2, 2021, according to CoinMarketCap.
Bill Noble, citing 1987, says this scenario will only happen if history repeats itself and a bond market crash hits the stock market. According to the analyst, the promising situation for crypto is that crypto traded back and forth in a range just like stocks did during the last bond market crash in 1994. The analyst states that the worst-case scenario for crypto is an increase in bond yields in line with what happened in 1987 just before stocks crashed. Noble continues:
Here’s the balancing act: If stocks crash, we believe crypto will clearly pull down. But crypto will come back much faster.
While falling stocks have caused Bitcoin to return to the levels last seen in 2020, Noble notes that he is confident this will not be the start of a dreadful ‘crypto winter’. Citing a survey released on April 11 that showed financial advisors believe 6% of clients’ money should be in crypto, the analyst says the situation is much more clear for digital assets than for past declines.
Bill Noble thinks that if there is a downturn in crypto, it will most likely happen in the summer. The analyst acknowledges that it may be wise to have cash ready to distribute, but the unpredictability of inflation and how the Fed will respond to it complicates the picture.
Top 2 altcoins to consider
As stocks drop will bring Bitcoin down, any weakness in the leading crypto will have a tremendous impact on altcoin projects or smaller cryptocurrencies.
In September, Noble expressed its love for three lesser-known tokens: AirSwap (AST), Eden (EDEN) and Immutable X (IMX). Noble notes that these altcoin projects had their ‘day’ but have since faded. Now, he advises crypto investors to be selective and manage their risk with altcoin projects. The two altcoins Bill Noble is currently bullish on are Near Protocol (NEAR) and Cosmos (ATOM).
Analyst, “Sometimes in crypto, when crypto is sideways or slightly down, I call it the single-coin market phenomenon: where the market falls, there is a token that can rise. We saw it first with Avalanche (AVAX), then with Terra (LUNA). We saw this with THORChain (RUNE), a DeFi protocol. And NEAR might be next,” he says.
“I would almost call Cosmos a value investment,” says the analyst, which won’t deliver extraordinary upside returns, but is wise to the dollar-to-cost average due to its ability to connect other Blockchains and its relationship with Blockchains like LUNA.
The analyst states that when investing in Cosmos, a large number of airdrops will be received. As we covered in the news on Kriptokoin.com, every time Cosmos connects to a protocol or helps another protocol connect to it, Cosmos stakers receive airdrops from the tokens of the new protocols.
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