Back during the first half of April of this year when Bitcoin (CCC:BTC-USD) was inching its way toward unprecedented heights, it reached the pinnacle — only to suffer a steep drop. Following a quick rally higher, BTC again tumbled, this time more severely, sending a panicked signal to other cryptocurrencies. As sector valuations showed no signs of stopping the damage, a sick feeling hung over rational investors of cryptos.
Now, I saw rational because the people who hold on for dear life (HODL) will diamond hands their way to losses — that much is a given. However, relying on that sentiment for objective guidance for cryptos is flawed for obvious reasons. You might as well just nail the compass due north, irrespective of whether it’s truly pointing north or not.
On the other hand, everyday investors — those that don’t think holding onto steep double-digit losses is normal — prefer some logic in their strategies. Unfortunately, when July rolled around, most cryptos appeared to be in desperate straits. After having crossed above the $60,000 threshold, Bitcoin dipped briefly below the $30,000 level, which apparently comforted market participants. From there, BTC shot upward, sending left-for-dead cryptos into a frenzy.
While most of the attention was on Bitcoin because of its industry-leader status, bold contrarians focused instead on alternative cryptos or altcoins. The number of blockchain-based digital assets tracked on CoinMarketCap is now past the 14,000 mark. That means there’s plenty of opportunities for investors to make ridiculous, yes even lifechanging profitability. It’s happened to me, so I would know personally.
But the most remarkable altcoins are the ones that really appeared to be on death’s door, only to enjoy a phoenix-rising-from-the-ashes moment. While I’m not going to say lightning will strike twice, these are the cryptos that are getting a second chance — and that are making the most of it:
- XRP (CCC:XRP-USD)
- Polkadot (CCC:DOT-USD)
- Solana (CCC:SOL-USD)
- Terra (CCC:LUNA-USD)
- Polygon (CCC:MATIC-USD)
- Bitcoin Cash (CCC:BCH-USD)
- Crypto.com Coin (CCC:CRO-USD)
Before you get too comfortable with the perma-bull thesis for cryptos, you should realize that a bear market phase will surely arrive. When it does, it could be the mother of all red ink, because people will initially pour in based on the prior Pavlovian response of always buying the dips, only to be rejected this time around. Keep this in mind before bidding up the market.
Cryptos Back From the Dead: XRP (XRP)
If we’re on the topic of cryptos that suffered a near-death experience only to come roaring back, we can’t not talk about XRP, perhaps the most controversial digital asset. Ripple Labs being the architect, XRP entered the fray to provide utility for blockchain technologies; namely, a low-cost, lightning-quick payment system that could theoretically compete with traditional bank wire transfers.
Unfortunately, the asset caught the eye of the Securities and Exchange Commission, which alleged in a lawsuit that XRP was a security disguised as a cryptocurrency. Personally, I believe the bigger issue is whether or not XRP is a centralized protocol as opposed to a decentralized one. Mainly, without the ability for public miners to mine XRP and thereby control in a distributed decentralized manner the coin’s supply mechanisms, the SEC may have a point.
Let me be 100% clear: I’m not a lawyer and I have zero idea how the courts will rule on this ongoing case. However, it’s safe to say that XRP skyrocketed when everything about cryptos seemed to hit rock bottom in the second half of July.
But can it maintain momentum. I’ll tell you this much: the technical structure of XRP looks a lot better now that it did months ago.
Polkadot (DOT)
Often labeled the Ethereum (CCC:ETH-USD) killer, Polkadot garnered tremendous hype within the blockchain community back in 2020. Further, that sentiment spiked considerably — this time attracting the mainstream — in early 2021. While so many cryptos allude to profitability potential by its backers, Polkadot is part of a new generation of digital assets, focusing on utility and practicality.
According to CoinMarketCap, “Polkadot is a sharded multichain network, meaning it can process many transactions on several chains in parallel (‘parachains’). This parallel processing power improves scalability.” Basically, Polkadot represents a series of multilane highways, thereby enabling greater efficiencies and speed through its network.
It’s a better mousetrap, but in the absolute best possible sense.
However, it did not look that way back in the summer. On July 19, DOT was trading hands at just under $11, which was well off from its prior record valuation. In the springtime, DOT was around $48, so yeah — this was a shock to the system.
Still, Polkadot made a remarkable recovery, soaring above the $50 threshold. Just recently, DOT hit a record, coming in at $55. Talk about coming back from the dead!
Cryptos Back From the Dead: Solana (SOL)
On a technical or pricing dynamics level, I wouldn’t necessarily classify Solana as one of the cryptos that was bleeding out in the emergency room. To be fair, on a percentage basis, circumstances looked very grim for SOL. From its May peak of $58, SOL found itself trading hands at $22 on July 20.
No, it’s not the worst thing to happen in cryptos. However, a loss of 58% will surely sober anyone up. But from there, Solana printed an utterly magical — and I would say incomprehensible — rally.
To make a long story short, Solana coins recently reached a high of $260. But with Solana reaching toward the stratosphere, is now a good time to consider the coin?
You should note that Solana is one of the blockchain initiatives tied to decentralized finance (DeFi), which aims to shift economic balance of power from central banks to the people. It’s a lofty goal but like the other 14,000 or so coins and tokens that litter the blockchain space, it might not pan out.
Personally, slowing volume levels are guiding me to a cautionary position, waiting for a possible discount in the future.
Terra (LUNA)
One of the most intriguing cryptos available for acquisition, Terra drew significant interest early this year. At the beginning of January, LUNA coins traded hands at around 63 cents. Fast forward to March 20 and you could buy a coin for nearly $22. That makes for near 35X return within one quarter of action.
Now let’s step aside for one second. Casual observers may wonder why “junk” assets like Shiba Inu (CCC:SHIB-USD) seem to defy all laws of market gravity. While I’m not an arbiter of all things cryptos, what I can tell you is that when you have a sector where 35X gains are possible inside three months, you’re going to start looking around for the next big thing.
It’s human nature. And if you’re a psychologist or someone adept at understanding human behaviors, you could do marvelously well with cryptos.
If that wasn’t enough, after cratering in May, LUNA is back at it again. This time around, the coins reached a peak close to $55. Underneath this engine is a fiat-pegged stablecoin architecture which aims to power a price-stable global payments system. It’s quite the setup though investors should exercise caution: LUNA price keeps going up but volume levels are not confirming, instead fading downward.
Cryptos Back From the Dead: Polygon (MATIC)
When I look at the price chart for Polygon, I can’t help but marvel at the astounding turn of events. When everyone was turning the calendar to 2021, MATIC coins were priced just below the 2-cent threshold. But given the intense ride higher of Bitcoin and other cryptos, it was (in hindsight) inevitable that a rising tide lifts all boats.
Soon enough in the heart of the spring season, Polygon coins found themselves within striking distance — at least relative to cryptos — of the $3 mark. Following an almost straight drop downward, MATIC bounced immediately higher to $2.26, close to the prior $2.56 peak but not quite enough. The bears sensed trouble and began “attacking” the coin, eventually slipping to 62 cents on July 20.
Well, someone in the blockchain community might want to memorialize this date because from there, the bulls came roaring back. At the time of writing price of $1.68, circumstances look much better than they did in July. However, this is one of the come-from-behind cryptos that did not reach its all-time high. Further, technical weakness beginning in August suggest that investors should take a conservative, cautionary approach with MATIC.
Bitcoin Cash (BCH)
Among cryptos that came back from the dead, you’ll admittedly find much better candidates than Bitcoin Cash, although let’s be clear: BCH did suffer quite steeply.
Tagging along for the Bitcoin ride, the hard forked version of the original virtual currency enjoyed a sizable rally. In the spring season, Bitcoin Cash popped above the $1,500 level, a clear psychological indicator. Had it held, it’s possible that BCH could have targeted the $2,000 mark.
Of course, that wasn’t to be as Bitcoin Cash tumbled along with most other cryptos. In its darkest hour during the aforementioned month of July, BCH traded just below the $400 level. It’s made a comeback since then, although the magnitude of the rally — approximately 70% between July 20 and Nov. 12 — is not exactly endearing stuff.
Yes, equities investors will take 70% returns in a half-year period any day of the week. But it’s hardly groundbreaking for cryptos.
Still, many if not most of the come-from-behind names are well overstretched against prior thresholds. With Bitcoin Cash, there does seem to be some room for improvement. Certainly, you should watch this space for potential profitability.
Cryptos Back From the Dead: Crypto.com Coin (CRO)
I’m not going to give a recommendation to buy Crypto.com Coin because 1) I don’t do recommendations and 2) CRO seems extremely overbought. Further, because Crypto.com Coin — which CoinMarketCap labels as a token — is priced at only 35 cents per unit, the law of small numbers comes into play.
By that, I mean it doesn’t take much for low-priced cryptos to jump higher, which is what makes them popular. It’s hard to acquire one full unit of Bitcoin and even if you did, the profitability potential is relatively small due to its more stable nature. On the other hand, small-denomination assets can devastate you because it doesn’t take much for them to collapse.
You’ve got to pick your poison.
And poison was exactly what Crypto.com Coin appeared to have drunk. Back in late June, CRO slipped just underneath the 9-cent level, spelling trouble for the digital asset. But since then, the coin that’s a token trudged forward in a controlled manner. That would have been the time to buy. Recently, though, CRO has gone bonkers, giving it credibility as a master of comebacks but not as a discounted opportunity.
Still, it’s possible that Crypto.com Coin could come down, which would make it more attractive given its high-profile nature (for instance, it’s heavily featured in Formula 1 races).
On the date of publication, Josh Enomoto held a LONG position in BTC, XRP, ETH and BCH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
