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Cardano ($ADA) and Polkadot ($DOT) are grabbing attention, but not necessarily for the right reasons. The Glassnode cofounder's recent analysis suggests that these altcoins could be a risky play in the short term. The strategy? Short these alts as Bitcoin nears resistance and goes long when BTC is near support. If these coins spike, consider shorting post-spike.
Over the past month, Cardano's price has been oscillating between $0.25 and $0.29, with no significant upward momentum. Polkadot has not fared much better; its price has ranged from $4.25 to $5.07. The lack of a strong upward trend makes these altcoins susceptible to market volatility, especially when Bitcoin is struggling.
In the short term, both $ADA and $DOT have shown a lack of bullish signals. $ADA's price has been mostly stagnant, hovering around the $0.25-$0.29 range. $DOT's price has been equally uninspiring, fluctuating between $4.25 and $5.07. The midterm outlook is not rosy either. With Bitcoin's resistance levels acting as a market barrier, these altcoins are not the best candidates for a bullish breakout.
The Glassnode cofounder advises looking for alts that have outperformed and shorting them as Bitcoin nears resistance. In the case of $ADA and $DOT, the lack of strong performance makes them prime candidates for this strategy. If these coins do experience a sudden spike, the recommendation is to short them post-spike, capitalizing on the likely retracement.
One of the key factors to consider is liquidity. A lack of it can exacerbate price swings, making these altcoins even riskier. With the market still heavily shorted, the absence of sufficient liquidity could lead to sharp declines.
While $ADA and $DOT have their merits, current market conditions make them a high-risk play. The strategy of shorting these alts near Bitcoin's resistance levels and going long near support levels could be a way to navigate through this uncertainty. But tread carefully; the market is as unpredictable as ever.