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10/06/2023

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Crypto: When is the 'Perfect' Buying Opportunity?

Crypto investors always look to ‘time’ the market by buying at the lows and selling at the tops. However, such attempts are not always successful. While there are multiple indicators that help in evaluating...

Crypto: When is the 'Perfect' Buying Opportunity?

Crypto investors always look to ‘time’ the market by buying at the lows and selling at the tops. However, such attempts are not always successful. While there are multiple indicators that help in evaluating peaks and troughs, their accuracy gets skewed at times. Several great months with positive ROIs can be registered during macro bear markets. Likewise, crashes can transpire during on-going bull markets as well.

A recent analysis by Econometrics pointed out that there is not much of a difference between the distribution of monthly returns during bull and bear markets. As illustrated below, during several bear markets, both ETH and BTC have fetched investors returns greater than 50%. Similarly, the severity of corrections during bullish phases have resulted upto 30%-40% monthly depreciations. Only during the first bull market after ETH’s launch, a deviation from this trend was observed.

Source: Econometrics

Also Read: Analysts Cut Down Coinbase Q3 Revenue Estimates by 7% to $609 Million

So, even though it is not possible to exactly figure out when the market transitions from one regime to the other, investors can strategically seek entry positions. The newsletter’s author noted that the underlying lesson is not wait for a clear bull market to take a position, but rather execute whenever an opportunity arises. Chalking out what to expect going forward, Ecoinometrics’ thread on X [formerly Twitter] asserted,

“The macro story is pointing at a recession in the coming quarters. That means you are likely to get good buying opportunities in the near future. Be ready to seize those opportunities.”

Also Read: Ethereum Valued More than McDonald’s Despite $11 Million Liquidations

Crypto Assets to Keep an Eye On

Another parallel analysis by Santiment brought to light a host of assets that are worth keeping an eye on. Avalanche was one among the trending assets at press time. The Stars Arena development and the ability to buy shares and tip posts were chalked out as the main reasons of the increased traction of this asset. According to Santiment, Bitcoin, Ethereum, XRP and ADA could also be bestowed with ripple effects.

Also Read: JPMorgan: Ethereum has Become ‘More Centralized’ Since Merge

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