Altcoins too risky right now?

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As a researcher with over a decade of experience in the financial markets, I have learned to tread carefully when it comes to making bold moves during times of high uncertainty, such as the U.S. presidential election. The volatility that follows such events can be unpredictable and potentially disastrous for those who are not well-prepared or well-versed in risk management.

Given that the U.S. presidential election results are imminent on Tuesday, investing in any altcoins at this moment might carry significant risk. Should one consider it an opportunity for the daring, or is it more prudent to wait for clearer signs of certainty?

If you enjoy exploring financial territories beyond the comfort zone of most investors, it might be worth considering an investment in various altcoins at present. However, should Trump win next Tuesday’s election, whether Bitcoin and cryptocurrencies will soar (reach unprecedented heights) remains uncertain.

A Trump win?

For instance, if Trump were to secure the election victory, we might expect market turbulence. While some of this turmoil could initially bring positive outcomes, it could also serve as a ‘sell-the-news event’. Market professionals may be eagerly anticipating the chance to lower prices dramatically, as less experienced traders rush in to open long positions (often with high levels of leverage) in expectation of an upward trend.

Markets can be quite intricate entities, often exploiting traders who rely too heavily on optimism instead of well-considered and protected transactions. In such instances, the market tends to capitalize on these unprotected positions.

A Harris win?

Given all that’s been discussed, let’s ponder over the possibility if Kamala Harris and the Democrats emerge victorious in the upcoming elections. The polling data indicates a close race, with the outcome being uncertain. If Harris were to win, some experts suggest that it might not significantly impact cryptocurrencies in the broader picture. However, should the Democrats prevail, spending after the election is likely to escalate even further, creating a favorable landscape for cryptocurrencies.

Despite repeated attempts by the current Biden/Harris administration, under the leadership of a seemingly anti-crypto Securities and Exchange Commission (SEC) headed by Gary Gensler, cryptocurrencies continue to face hostility. The existence of Operation Chokepoint suggests that this could be more than just speculation.

Moving ahead, it’s reasonable to think that a Democratic administration might be more open to listening to the banking industry compared to a Republican one. Considering the stakes involved, banks are unlikely to view cryptocurrencies in a positive light.

Altcoin trading is probably not a good idea … yet

In light of all the preceding points, investing in altcoins on the day prior to the U.S. election might not be advisable due to the significant influence this event could have. While Bitcoin and other altcoins may seem poised for a rebound, the unpredictability of a U.S. election could potentially disrupt the market dramatically.

As a crypto investor, I’ve noticed that Bitcoin, the undisputed leader among cryptocurrencies, had a dismal close for the weekly candle last week and is currently hovering below the significant $69,000 support/resistance level. If Bitcoin encounters difficulties, it’s likely that altcoins will experience them in abundance as well.

Astute altcoin investors should always remain vigilant, keeping tabs on Bitcoin and a market that’s constantly in flux. Currently, the safest bet in crypto might be with Bitcoin or stablecoins. While altcoin trading offers potential for higher profits, it could be lucrative only when Bitcoin decisively breaks free from its prolonged phase of sideways movement.

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2024-11-04 17:04