After Bitcoin surged to $45,000, we started to witness rises in most altcoins like Cardano. Interestingly, at the time of writing, only 12 of the top 100 cryptocurrencies had negative weekly returns. The remaining 88 seem to be enjoying their earnings… Choosing alternatives for your portfolio can be quite daunting at this point. But analyzing correlation, profitability and ROI can help.

Cardano and a Is there a correlation between altcoins?

Historically, altcoins that have been more dependent on the movements of Bitcoin and Ethereum often benefit from their rallies. Therefore, the correlation that different cryptocurrencies share with the biggest altcoins in the market becomes quite important in deciding which one deserves a place in portfolios or not.

ADA’s correlation with BTC || Source: IntoTheBlock

At the time of writing, a number of altcoins correlate well with both Bitcoin and Ethereum. But Cardano (ADA) [0. 87, 0. 87], Chainlink [0. 86, 0. 87] and Litecoin [0. 88, 0. 84] managed to stand out compared to the others. According to analysts, if the uptrend of Bitcoin and Ethereum gains momentum, these three altcoins will likely be the ones that benefit the most.

Profitability status of Cardano and some altcoins

The price of Cardano was $1.56 at the time of writing. At this price, we can say that about 68% of HODLers are in profit. Similarly, Litecoin and Chainlink were trading at $162 and $24 respectively. Again when it comes to profitability, close to 62% of LTC HODLers and 58% of LINK HODLers appear to be in profit.

Usually, participants tend to exit the market immediately after making a profit. A whole new set of market participants have stepped into the crypto arena during the hectic April phase. However, profitability took a hit during the deadly crash in mid-May, and since then, HODLers have been desperately waiting for a train reversal. Therefore, it seems highly likely that such participants will exit the market in the next few days. In retrospect, the price of these altcoins may slide slightly south. However, this one also has a silver lining.

B It is useful to follow the head-to-head price!

Typically, the breakeven price is the change in value of a particular asset to generate normal profits. When it comes to Cardano, the break-even price is $1.49. For LTC and LINK, it costs $156.30 and $25.41, respectively.

Now, once the price of these altcoins manages to surpass the above-mentioned levels and rise even higher in the coming days, it may attract more participants to the market. Therefore, short-term ROI as well as incentivizing new entrants can be considered to have the potential to keep HODLers market-bound.

HODLing period and Return on Investment (ROI)

Cryptocoin. com, the average HODLing time for Cardano, Litecoin and Chainlink is currently 6.1 months, 1.6 years and 2.6 years respectively. Interestingly, the number of HODLers has increased significantly for all altcoins over the past few months. Long-time market participants are not new to bullish or bearish. Therefore, they will play a very important role in raising more money in the coming days. This will help the altcoins to increase in price. To be clear, the market has been pretty bumpy over the past month for most altcoins. However, Cardano (ADA), LTC and LINK managed to bring 9%, 14% and 30% to their HODLers.

Number of HODLs – Chainlink || Source: IntoTheBlock

So, keeping in mind the current state of the market along with correlation, short-term ROI, ownership and profitability aspects, it can be said that ADA, LINK and LTC are worth holding on for at least the next few weeks.

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Michael Lewis


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