The truth about most cryptocurrencies

Many investors into cryptocurrencies are holding coins and tokens that are not appreciating in value. Promises and predictions have not come to fruition. Is it time to sell them, and what is the best indicator of an altcoin’s potential?

Holder pain to continue?

There are certain altcoins that were born in previous bull cycles that many investors, particularly retail investors, are still holding today, in the hope that somehow these altcoins will return to previous highs, where in all likelihood, this was at or near the price they were bought at initially.

An added problem is that some of these altcoin projects have managed to attract big communities, and within those communities there are plenty who would continue to try and influence the rest to hold firm, that future technological breakthroughs will see the altcoin return to, and surpass, previous all-time highs.

However, for whatever reason, whether it is outdated or slow technology, poor tokenomics, a centralised authority issuing too many tokens, or just an unworkable or unneeded use case, these altcoins will likely keep bleeding out against the US dollar, and other cryptocurrencies, and the pain for holders will just continue.

Of course, there is always the chance that some breakthrough could be made, whether that is in the tech, or whether that is with some huge deal with a big company or perhaps even with some government. But the longer a crypto project goes without creating significant revenue, or without attracting plenty of actual users to transact on its platform, the more unlikely a positive deal is to take place.

One of the best indicators 

So what is arguably one of the best indicators for evaluating whether your altcoin is worth keeping or not? Very simply, you compare its price action with that of Bitcoin. If your altcoin is in an uptrend against $BTC over a decent period of time, the chances are that this could continue. But if the trend is down, and your altcoin continues to lose value against $BTC what is the point in keeping it?

The incredibly liberating thing about comparing all altcoins to $BTC is that you will notice that very few of them are actually consistently outperforming the king of the cryptocurrencies since this bull market began in late 2022/early 2023.

Two charts that do not inspire confidence (and one that does)

Source: TradingView

Source: TradingView

The previous two charts do not exactly inspire confidence. $XRP (first chart) has been dragging along at a similar low price against BTC since 2114, and $ADA has been doing the same since 2018.

Source: TradingView

However, the chart above of $RNDR shows the opposite. An uptrend against $BTC is definitely in play, and has been since the beginning of 2023, although the price will need to be watched to see that the bounce from the 0.618 continues, and that the resistance is eventually broken.

Do not become wedded to your altcoins

The mistake many investors make is to become wedded to their altcoins. It has to be realised that all cryptocurrencies need to be constantly evaluated. If they are not up to the mark, i.e. they are not keeping up with Bitcoin, and unless there is a very good reason, this is arguably the time to get rid.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.