A popular crypto trader is cautioning digital asset investors about the fate of altcoins as the markets take a tumble to start the new week.
The analyst known as Altcoin Sherpa follows up on a May 6th tweet where he warned that it could be “lights out” for many altcoins if certain price levels were lost.
Now he is telling his 175,300 Twitter followers that competing layer-1 smart contract platforms Solana (SOL) and Avalanche (AVAX) are both at risk of hitting his bearish targets.
“Bounce or die.”
At time of writing, Solana is down 15.71% in the past day and trading for $64.24, quickly approaching Altcoin Sherpa’s downside target of $48.56.
Avalanche has dropped 17.25% in the last 24 hours to a value of $42.37, very close to Altcoin Sherpa’s target of $39.17.
Altcoin Sherpa next issues a broader warning by reminding traders that many altcoins will eventually return all of their bull market gains.
He highlights several altcoins whose point of control (PoC) might at least provide a support level, namely cross-chain decentralized finance (DeFi) platform Alpha Venture DAO (ALPHA), cross-chain data network Band Protocol (BAND), and DeFi platforms Compound (COMP) and Aave (AAVE).
$ALPHA $BAND $COMP $AAVE: Wild to see many of these other coins go back to their origin of the pump. The one saving grace for some of these is that the PoC is still lower -those should be decent areas of support. Many important lessons can be drawn from these charts… pic.twitter.com/H7QZNpVs7A
— Altcoin Sherpa (@AltcoinSherpa) May 8, 2022
The pseudonymous trader goes on to say that most crypto projects are “vaporware” whose price rises could be attributed to hype rather than actual utility.
“Most of these projects are vaporware and will nuke to 0 as their tokens die. The hype for many of the projects are mostly all speculator driven and fade as interest dies.”
The Sherpa concludes by invoking the Lindy effect – a theory that posits the longer a non-perishable item exists, the longer it’s likely to remain – to explain why Bitcoin (BTC) and Ethereum (ETH) remain the kings of crypto market capitalization despite countless competing projects arising over the years.
“At the end of the day, it’s important to recognize why BTC and ETH are so hard to outperform long term and the Lindy effect seems really real in crypto.
Projects will come and go each year and most will still die – even the very good ones such as the first four mentioned.”
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/cooperr/redgreystock
Credit: Source link
