Although cryptos to watch have skyrocketed, instilling a dramatic confidence boost in the underlying blockchain ecosystem, we also have to ask the natural question: why? Of course, a major reason centers on the speculation of an imminent approval for a spot-crypto exchange-traded fund. However, broader speculation about monetary policy also undergirds sentiment.

In particular, investors anticipate that the Federal Reserve will soon reverse its regimen of raising the benchmark interest rate. Instead, according to The Wall Street Journal, market anticipates bid up the benchmark S&P 500 index substantially in recent sessions. However, as the news agency points out, the wagers reflect “different possible paths for the economy, not all of them favorable for stocks.”

I’d also argue the same point for cryptos to watch. Listen, I’m the last person to criticize virtual currencies given how much the blockchain changed my life. At the same time, I have an internal bovine scatology radar that, while not blasting the rally, makes me cautious.

Specifically, I’m referring to the idea that the Fed will cut rates multiple times next year. I’m sorry but it’s basic economic principles. You don’t cut rates when the economy is booming because that only fuels an already-overheated economy. Instead, you do it when the economy is demonstrating recessionary conditions.

I’m just putting this out there so that you can make an informed decision on the below cryptos to watch.

Bitcoin (BTC-USD)

Easily the star of the show when it comes to the resurgence of cryptos to watch, Bitcoin (BTC-USD) decisively crossed above the $40,000 level over the weekend. What made it more surprising is that BTC was trending rather frustratingly in the sub-40K range. Now, sitting under the 42K level in the wee hours of Tuesday morning, who would bet against it?

Fundamentally, Bitcoin has witnessed tremendous interest as investors prepare for a possibly imminent approval of a spot BTC ETF. I don’t dismiss the idea that the number one crypto by market capitalization can achieve that approval. However, I think it’s also a time to remind ourselves of this adage: buy the rumor, sell the news.

To be sure, virtual currencies seem to operate under their own ecosystem. Nevertheless, the underlying fundamentals of fear and greed arguably remain exactly the same as other capital markets. Also, it’s worth mentioning that right now, 88% of BTC holders are (finally) in the money (ITM).

If circumstances again get squirrely, that could spark a panic as investors don’t want a repeat of 2022.

Ethereum (ETH-USD)

After multiple attempts of trying to snag the $2,000 price point, Ethereum (ETH-USD) finally made good. Due to Bitcoin raising the tide of cryptos to watch, ETH now emphatically stands above this psychological barrier. As of early Tuesday morning, units of the number two crypto by market cap trade hands at $2,232.

Fundamentally, Ethereum presently enjoys downwind benefits from the possible Bitcoin ETF approval. While BTC again represents the star of the show, other blockchain-derived decentralized digital assets should gain a credibility boost. After all, an ETF would allow traditional investors – both retail and institutional – to dip their toes into the blockchain. However, the mechanics would ultimately be “fiat” based, for lack of a better word.

Still, you want to be careful with Ethereum. Similar to Bitcoin, 76% of ETH stakeholders are now ITM. That’s a bit worrying if cryptos encounter an unexpected wave of volatility. To repeat, investors don’t want to see the red ink of 2022 materialize yet again.

Also, TipRanks reports a 1.58% reduction of large ETH holders’ position. I’m not criticizing ETH but you need to watch this stat carefully.

Tether (USDT-USD)

As a stablecoin pegged to the dollar, Tether (USDT-USD) is distinct from most other cryptos to watch in that the accumulation of its units doesn’t center on capital gains speculation. Rather, Tether promotes convenience. When you’re participating in the virtual currency market, you want to have your funds in Tether rather than first undergo a fiat-currency-to-virtual-currency transaction.

In addition, selling hot digital assets and converting the profits into USDT (rather than dollars) enables traders to engage other opportunities quickly. So, all other things being equal, when demand for decentralized assets suddenly skyrocket – as it did over the weekend – Tether should be slightly worth more (at least for a brief moment) than the greenback.

However, that’s not what we saw throughout much of Monday’s trading. Since roughly the opening bell on Wall Street, USDT’s peg to the dollar declined slightly. In contrast, just as you would expect, the peg favored Tether over the greenback on Sunday when cryptos went gangbusters. I’m not sure if this is just a meaningless blip or a broader warning. Either way, you should keep your eyes on it.

Binance (BNB-USD)

While speculation dominated the markets – both equities and cryptos – during the Covid-19 crisis, newbie gamblers learned a painful lesson. Eventually, the fundamentals matter. Just look at the broader performance of some of the most popular meme stocks. Nevertheless, people insist on placing high-risk wagers. If you’re one of them, Binance (BNB-USD) could be an interesting idea.

I say that mainly because of its underperformance relative to competing virtual currencies. While Bitcoin, Ethereum and others are enjoying significant upside, BNB – the underlying crypto of the Binance platform – incurred muted price action. In the trailing 24 hours, it only gained about 1.5%. During the past week, it returned a bit over 3%.

Still, on a relative scale, you could make the argument that it’s undervalued. Of course, let’s address the giant pink elephant in the room. Late last month, the Justice Department announced filing criminal charges against Binance and its CEO, Changpeng “CZ” Zhao. If that doesn’t scare you or you believe the power of the blockchain community can overcome this blight, BNB could be a buy.

XRP (XRP-USD)

As much as people love cryptocurrencies, it’s important to realize that speculation is speculation. Whether we’re talking about gold, tulips, or electric vehicles, at some point, the intersectionality of fear and greed can dissociate underlying target assets from their core fundamentals. Don’t think it can’t happen to cryptos because it can. And that’s a great segue to discuss XRP (XRP-USD).

Just like Binance above, XRP represents one of the top 10 decentralized assets that hasn’t discernibly benefitted from the rally. In fact, as of the time of writing (early Tuesday morning), XRP finds itself almost 2% down. In the trailing week, it’s up nearly 4% but let’s be real: when it comes to digital assets enjoying a demand surge, 4% up is nothing to write home about.

Still, the point remains about fear and greed. While cute acronyms like HODL (holding on for dear life) obfuscate matters, the reality is that no one wants to hold the bag. Relative to other cryptos, XRP doesn’t demonstrate a wildly unsustainable nature. It trends modestly above its 50-day moving average, not ridiculously above it.

Solana (SOL-USD)

One of the most popular alternative cryptocurrencies or altcoins, Solana (SOL-USD) began skyrocketing in earnest around mid-October. In many ways, SOL symbolized a leading indicator for other cryptos. On paper, it’s still doing its thing. For example, in the trailing one-week period, SOL gained over 11% of market value. Nevertheless, a closer look reveals some concerns.

For one thing, SOL suffered a loss of almost 7% in the trailing 24 hours. Under context, it’s not a cause for alarm. At the low point in October, SOL was trading hands at around $21. It’s over $60 now, demonstrating stratospheric acceleration. Thus, a dip – even a sizable one – isn’t unexpected. However, no other digital asset in the top 10 (by market cap) incurred such red ink.

Put another way, Solana could presently be an early warning indicator for other cryptos. Therefore, I would pay close attention to SOL, even if you’re not interested in buying it. Also, while you’re at it, look at the contrast between rising price action and fading volume. Ordinarily, you want to see rising volume confirm rising prices. And that’s a contrast witnessed in other cryptos as well.

Dogecoin (DOGE-USD)

As a cryptocurrency that materialized originally as a joke, Dogecoin (DOGE-USD) doesn’t natively inspire confidence. To be clear, that’s not a slight against DOGE, which features a Shiba Inu as a mascot. Rather, people just have a tendency to dismiss enterprises and endeavors that lack serious intent. That said, there’s nothing not serious about how much the underlying blockchain community supports DOGE.

Citing data from CoinMarketCap, Dogecoin gained almost 17% of market value in the past one-week period. As of this writing, the second-closes performance among decentralized assets in the top 10 by market cap is Bitcoin at 13% up. Stated differently, even with the spotlight shining on BTC for completely understandable reasons, DOGE is actually the percentage performance winner.

So, if you want to speculate on cryptocurrencies (but only with money you can afford to lose), it might make more practical sense to gamble on Dogecoin. First, you’re dealing with greater leverage. Second, DOGE features an 84% correlation with BTC. So long as the community holds strong, DOGE is Bitcoin but cheaper.

On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT and XRP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.