Imagine buying an altcoin and giving in to the selling pressure before booking profits vs buying and posting double-digit gains in under 30 days. Selling early is one of the biggest regrets of retail traders and negatively impacts trader sentiment as well.
This makes it crucial for traders to define a dream portfolio and HODL/ accumulate altcoins through the dip. Altcoins are becoming the deciding factor of portfolio returns due to increasing dominance and the extended rally this season. Top altcoins like BNB, whose price went up nearly 30% in 48 hours from April 11 to April 13, 2021, and hit a high of $609 has offered these returns within 2 days. That is a high short-term ROI, higher than most traders achieve by HODLing for 90 days.
Additionally, BNB’s growing market capitalization led to the flipping of XRP, ranking third. The only other popular altcoin that has gained market capitalization in the short term is DOGE. While the thriving meme culture and Elon’s statements have an impact on DOGE’s price, BNB’s price was largely driven by traders, HODLers and sound fundamentals. When building a dream portfolio, DOGE could bring the element of surprise and BNB would offer high short-term ROI. The key to utilizing these gains would be to book timely profits.
The 6600% rise of DOGE has driven several portfolios to profitability, the spikes of volatility have come as much from retail participation as they did from institutional buying.
DOGE is concentrated in a few portfolios: the concentration is 65% based on on-chain data from intotheblock. Another altcoin that offers high returns owing to on-chain activity is MATIC. Though it is a layer 2 ETH scaling solution, MATIC’s price rally has brought it head-on with Ethereum as a competitor in scaling wars.
As MATIC trades at $0.8196, 100% of MATIC’s HODLers are profitable. Based on data from Messari, the following table shows MATIC’s high short-term ROI in 2021.
In the past 30 days, MATIC HODLers have been rewarded with 120% gain. Adding MATIC to the dream portfolio is sure to increase the volatility of the overall portfolio.
Just as lesser-known altcoins are taking over the current rally, the last altcoin rally’s leader, XRP, has offered over 700% gain YTD. Despite SEC’s lawsuit against Ripple Labs and the legal updates that made traders skeptical about XRP, the altcoin has high volatility and high trade volume in the past two weeks. The trade volume is currently dropping across spot exchanges, this could be accumulation or pullback from institutional traders before the price makes a comeback above the $1.6 level.
Top DeFi and NFT marketplace tokens have offered double-digit gains with high liquidity, however, the altcoin rally is led by assets that are popular and managed by institutions like Grayscale. This makes it easier for retail traders to mimic institutional moves since the return on altcoins preferred by institutions is largely high in 60-90 days or the long-term. This makes it easier to build and maintain a dream portfolio while booking consistent profits.
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