- Bitcoin and ethereum had an outstanding October after slipping in September.
- Bill Noble, senior market analyst at Token Metrics, predicted the price action seven weeks ago.
- Here are three altcoins that stand out with ethereum set to beat bitcoin through year’s end.
Two months ago, Bill Noble, senior market analyst at Token Metrics, made a prediction: Cryptocurrencies will slump in September before embarking on a monster rally in October that rolls through year’s end. And he was right — at least about the first two legs of the forecast.
Bitcoin fell 7.3% in a rocky September but roared 38% higher in October. Ethereum, the world’s second-biggest crypto, saw its native token, ether, retreat more than 12% in September before rising 22% in the next month.
While Noble’s boldest predictions — bitcoin hitting $100,000 in 2021 and ethereum reaching $6,000 to $12,000 — have yet to come true, he told Insider in a recent interview that he’s still bullish on the top two tokens, even as he revised his 2021 price targets downward for each.
Bitcoin, which currently changes hands for about $62,000, will likely end the year between $54,000 and $79,000, Noble said. He added that ethereum, currently valued at $4,350, will outpace bitcoin by climbing anywhere from 38% to 84%, landing between $6,000 and $8,000. Noble said it will be an “orderly rally,” meaning there will be dips to buy.
Ethereum is a better bet than bitcoin at this point, in Noble’s view, because interest in ethereum futures is rising while bitcoin trading has been relatively muted despite the launches of bitcoin futures exchange-traded funds (ETFs). Many potential bitcoin buyers, including mutual funds, are waiting on the sidelines for a 10% dip in the crypto before getting in, Noble explained.
Though a bitcoin futures ETF expands access for the digital currency to investors on traditional brokerage firms like Fidelity or Charles Schwab, it also has a downside that few are talking about, Noble said: It makes bitcoin easier for hedge funds to short, or bet against.
Noble’s crypto prognostication process
Projecting what’s next for cryptocurrencies is part art, part science, Noble said. Unlike stocks, which can be valued rather easily using a myriad of metrics like price-to-earnings and price-to-sales ratios of the companies they represent, most digital assets don’t produce cash.
That lack of fundamentals makes tokens much more difficult to evaluate, leaving many crypto analysts to rely heavily on technical analysis, or the study of charts of price trends in assets.
While the first step of Noble’s three-part prediction process is to study charts to spot patterns, he uses much more than technical analysis in his crypto calls.
Noble relies on Token Metrics’ artificial intelligence (AI) research platform that he said helps him focus his analysis by filtering out low-quality tokens. The software uses technical analysis, “textbook-style risk management,” and machine learning to give tokens a quality rating and find combinations of tokens that work best. Then, the AI platform pairs the top-ranked coins and places them in short- and long-term portfolios to compare their performance to that of bitcoin.
Finally, Noble leans on researchers at Token Metrics that dive deep into coins that the firm’s AI platform highlights. The process, called “tokenomics,” looks at cryptos’ fundamentals by learning about their value propositions and the pain points they’re designed to solve, in addition to their underlying code, their issuance, supply, and staking mechanisms, Noble said.
Altcoins to add despite an ‘everything bubble’
While cryptocurrencies have had a year to remember as tokens rally and support from individuals and institutions steadily grows, there’s still a vocal army of crypto critics warning that the space has characteristics of a bubble and will eventually pop.
In what may be a surprise to some, Noble doesn’t necessarily disagree with that assessment, though he says the broad support of bitcoin and ethereum among big-money investors means a repeat of the cryptocurrency meltdown of four years ago is improbable.
“As the legacy world gets more involved in crypto, it becomes less and less likely that big cryptos will experience the crash they did in 2017,” Noble said. “Now, that doesn’t mean little cryptos and ‘meme coins’ like Shiba Inu (SHIB) can’t do what they’ve done lately. The speculative fires in the everything bubble is still in effect.”
Three altcoins stand out from the pack, in Noble’s view. Below are each crypto’s symbol, market capitalization, and commentary from Noble.
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