Crypto Check — 2 Winners, 1 Loser

Sep 12, 2021

After an incredibly bullish Labor Day weekend, the infamous crypto market volatility reared its ugly head. The price of Bitcoin ($BTC) fell from $51,000 to below $43,000 in a matter of hours on Tuesday morning, triggering a correction of more than 10% across the market at large.

Overzealous leverage likely contributed to this flash crash.

However, for more measured investors, the recent correction represents an ideal buying opportunity.

By zooming out and looking at longer-term trends around consumer adoption, the bullish case for crypto in general remains clear.

By focusing on crypto trading Mentions, we can see that the number of individual investors talking about trading cryptocurrencies may be down recently, -36% quarter-over-quarter, but remains up +361% year-over-year.

The significant amount of YoY strength seen across all cryptocurrency-related trends has helped inform our bullish outlook on the market at large…

As the price begins to rise across the board, we’re looking for opportunities to buy low and names showing unusual strength, especially in coins that are showing high levels of continued consumer and investor adoption.

Bitcoin Remains an Investor Favorite

The stubborn fact remains: Bitcoin and investment demand for Bitcoin aren’t going anywhere, as evidenced by the trajectory of underlying Purchase Intent Mentions.

We made a similar bullish argument when Bitcoin was trading below $30,000 earlier this year, and our outlook remains unchanged.

Speculation-driven fluctuations aside, there’s an increasing number of institutions, businesses, and now countries throwing in their lot with Bitcoin.

And with many more promising blockchain integrations on the horizon, we’re optimistic about the future of this emerging market.

Filecoin Emerging as Promising Technology and Altcoin

There’s another recent gainer that’s gotten our attention as of late: Filecoin ($FIL).

Filecoin is the leading blockchain solution for decentralized file storage and sharing.

This unique blockchain boasts the same core functionality as existing cloud storage systems such as Amazon Web Services (AWS), combined with the data integrity and privacy benefits of a decentralized network.

Crypto-specific chatter relating to Filecoin is on the rise but remains below all-time highs on a 90-day moving average.

The trend seen in the Mention chart above mirrors that of FIL’s price, which rose more than +400% in March before correcting roughly -60% in the following months.

FIL isn’t the most “meme-worthy” coin, and it has relatively low total Mention volumes.

Still, it’s hard not to be optimistic about Filecoin’s experienced team and compelling use case.

Dogecoin Could Get Left Behind

As the popular “meme” cryptocurrency, what Dogecoin ($DOGE) lacks in terms of a clear use case it makes up for with mainstream appeal…

But investor Mentions show that hype for this meme-inspired currency is fading relative to the broader market.

Crypto-specific Mentions of DOGE have fallen -41% QoQ and -51% versus the prior month on a seven-day moving average.

DOGE still maintains the No. 8 rank in terms of market cap, with more than $33 billion invested, and has gained by an impressive +2,650% YTD.

In recent months, its performance has fallen behind many other Top 10 standouts such as Cardano ($ADA) and Solana ($SOL), both of which are desirable due to their functionality.

We predicted this shift in June and expect to see DOGE continue to lose market share to more “useful” cryptocurrencies. We continue to feel this is a crypto worth avoiding.

With more and more stocks having exposure to the crypto markets, it’s important that we keep an eye on these developing trends.

As always, LikeFolio members will be the first to know when we spot unique opportunities to benefit from the powerful trends our software highlights. In fact, we’re working on one such opportunity right now, and will likely be issuing a bullish report in the coming week!

Andy Swan
Founder, LikeFolio