2020 was a rejuvenating year for crypto markets, with robust growth and resilience in the face of upheaval. The lion’s share of trading in digital assets went to Bitcoin and Ether, but altcoins are nonetheless attracting more and more traders’ attention. When the price of Bitcoin surpassed $50,000, it became too “hefty” for traders and investors. In 2021, the crypto market is seeing drastically higher demand for alternative digital assets, one reason being the boom in the decentralized finance (DeFi) sector. So even though most trading is focused on Bitcoin and Ether, altcoins are becoming an integral part of traders’ strategy for cryptocurrency platforms.
The only problem is choosing tokens from the vast selection. Which altcoins will have enough movement and offer liquid trading markets?
We spoke with crypto market expert Yury Mazur, head of data analysis at CEX.IO Broker, and asked him: “So what altcoins should traders pay attention to?”
“We’re constantly tracking user interest in particular cryptocurrency pairings,” he told us. “Our analysis of trading volumes on our platform between January and May showed that the top 5 most promising digital assets were the altcoins Ripple (XRP), Cardano (ADA), Uniswap (UNI), Zilliqa (ZIL), and TRON (TRX).”
For a long time, Ripple was among the top 5 cryptocurrencies by market cap, but in December of last year XRP prices suffered significantly from the SEC lawsuit against Ripple’s management. The Ripple price in USD dropped sharply, and the coin quickly lost its market cap standing. Since the beginning of the year, though, the USD price has bounced back by nearly 600%. “The uptick in interest toward Ripple was also reflected in the trading volume, which grew by 110% on our platform in May as compared with March,” Mazur notes. “The uncertainty around the outcome of the standoff with the SEC is a source of risk for the XRP to USD pair. Yet that exact risk underpins the coin’s volatility, and attentive traders can take advantage of that volatility to profit in the short term.”
In February 2021, ADA to USD prices demonstrated robust growth, jumping 300% from $0.35 to $1.45. Investors got a boost from ADA being added to Coinbase, which is often a strong driver of price movements. While there are analysts predicting a tenfold increase in this currency’s price, there are those who see Cardano as an example of hype. “The ADA to USD pair is interesting enough to warrant close observation, so as not to miss a sharp movement,” Mazur comments. “Its trading volume from January to May increased by almost 64%.”
The UNI token is one of DeFi’s powerhouses. A huge number of decentralized transactions passes through Uniswap, which keeps demand for the asset high. The UNI to USD pair was at $5.15 back in January, while in May the price had hit $42.42, an increase of over 700%. “While at the start of the year volumes came down, since March we’ve been seeing increases, and May volumes on CEX.IO Broker were up more than 25% as compared to March,” our expert says.
Although the Zilliqa token is not at the front of the pack by market cap, this coin’s explosive price growth has attracted the attention of the entire crypto community. The ZIL to USD price grew by 200% from January to May, from $0.08 to $0.24. In addition to general positive effects from global markets, ZIL prices are kept high by its creators’ active efforts to grow the token’s infrastructure and ecosystem. “This is another case where we saw trader interest during this period,” Mazur adds. “In May, trading volume for this token had grown over 73% since the start of the year. This cryptocurrency may also be of interest as a high-return staking asset on CEX.IO.”
TRX is the token for the blockchain platform TRON, whose purpose is the exchange of free, decentralized user content. The TRX to USD price has grown just over 600% since the start of the year. The coin has a broad, devoted community and is being promoted rather actively in the digital asset space. This is a bold project with its fair share of critics, who claim the network is actually centralized. However, the commissions on TRON are much better than on Ethereum, which ensures a constant flow of new users. This is also confirmed by the May trading volume stats for TRX to USD on CEX.IO Broker, which show over 350% growth relative to the start of the year.
“Bitcoin and Ether are the crypto market classics – their price charts are smoothed out by the large number of people trading them, and if this were the stock market, these would essentially be the blue chip stocks,” Mazur concludes. “It’s unlikely that any tokens will challenge Bitcoin or Ether for the top spot in the foreseeable future.”
According to Mazur, traders come to the crypto market to have the chance to jump on huge shifts and turn a profit on altcoins’ volatility. “Our stats show that traders are more inclined to long rather than to short, even though the platform allows them to take advantage of price movements in either direction,” he explains. “However, those who know how to work with dropping prices typically make relatively larger profits.” He also notes that traders on CEX.IO Broker trade in contracts for difference rather than the assets themselves, which allows them to take advantage of the price fluctuations without owning the assets themselves. To choose the right moment to open or close a position, they use the advanced set of technical analysis tools. The ability to open several accounts at once on the platform offers new opportunities for evaluating how effective different strategies are.