Making Money with Altcoins: When Is the Right Moment?

Contribution by Sam

Altcoins. They come in every color and flavor. They promise a fast network, low transaction fees, or specific applications that look impressive on paper. Some of them actually deliver on that, but for most projects the reality is that they die a quiet death. Even so, they attract plenty of speculators. People who passionately believe in the intended innovation, or simply investors who want to hitch a ride for a while so they can reinvest their profits into, say, a larger bitcoin position.

That's no easy feat, by the way. Most altcoins only ever see one real bull market. That may sound harsh, but it's exactly what the charts show. Anyone who buys an altcoin to hold for several years, in the vast majority of cases, ends up a so-called bagholder; left holding the bag.

Take Verge (XVG) from the 2017 bull run, for example. Its price went from practically nothing to 30 cents in December 2017. Had you bought 100 euros worth of Verge in March 2017, you'd have been a millionaire by December 2017. At the time, this was driven by a combination of extreme mania and the involvement of the now-deceased John McAfee.

In the next bull market of 2021, XVG got no higher than about 8 cents. That's over 70 percent below the peak of four years earlier. For comparison, over this same period bitcoin went from a high of around 20,000 dollars at the end of 2017 to roughly 70,000 dollars in 2021.

From the 2021 bull market, Orion Protocol (ORN) is a comparable example. ORN peaked at around 29 dollars thanks to the buzz around DeFi, while less than a year earlier you could pick it up for just 50 cents. After a painful bear market in 2022 and 2023, the price fell back below 50 cents. The new bull market began, but the price barely scraped above 3 dollars.

That's why it's important to realize that while great returns can be made on altcoins, a second cycle doesn't produce a new peak for most of them. A price sitting far below the previous top is therefore no reason to buy or to DCA. Still keen to get some exposure to altcoins?

Then above all, approach it from a position of strength. Which altcoin is showing strength during a weak market? Often altcoins follow bitcoin upward with a delay from the bottom. In fact, those are usually the uptrends that last the longest. Participants gradually take on a bit more risk.

The interesting exception lies in the bottom itself. The final blow of a correction or bear market is often an economic shock or an event that drags down the entire financial market. Altcoins that at that moment no longer fall to a new low while bitcoin does become very interesting to keep an eye on.

On the chart, we then want to see bitcoin print a lower low in a potential support zone while the altcoin in question prints a higher low at the same time. It's important to know, however, that this doesn't necessarily constitute a buy signal on its own. In a weak market it can always happen that the entire market continues its slide downward. Only once the signals of a potential (local) bottom in bitcoin grow increasingly strong does it become worthwhile to start looking at relative strength.

Let's go back to early 2025. Around Donald Trump's inauguration in January, bitcoin topped out at 110,000 dollars. In the months that followed, the price corrected to somewhere around 74,000 dollars, with the bottom on Monday, April 7. The price dropped more than 15 percent within a week after President Trump rolled out an entire list of hefty tariffs on Liberation Day. Here too, then, was an event that dragged financial markets down as a whole.

While bitcoin printed a lower low, PEPE managed to print a higher low compared to the previous month. What followed was a rise of nearly 200 percent in less than 2 months. Over that same period, bitcoin rose "only" 50 percent.

Of course, there are probably examples to be found that did even better over this period, but PEPE was already a liquid coin and a well-known name at the time.

Ironically, that turned out to be PEPE's local top, while bitcoin ultimately managed to print an even higher top in October 2025. What's more, this PEPE top was over 40 percent below the all-time high it set in December 2024.

This nicely illustrates that altcoins offer the chance to achieve wonderful returns in a short space of time, but that timing determines a large part of the outcome. Buying or selling too early or too late can cause your portfolio a lot of pain in a short period.

With the expectation that bitcoin is now moving toward the end of this bear market, this is a topic that deserves some attention. Should bitcoin correct once more, accompanied by signals that the bottom is behind us, then for altcoin enthusiasts it would be a great moment to hunt for relative strength.

Which narrative or which altcoin will then rise to the surface is still unknown. So above all, keep an open mind. With the many thousands of altcoins entering the market every week and fighting for investors' attention and money, chances are the favorites of the previous bull market won't deliver the same returns as they did last time.

We'll continue with the following topics:

1. Bitcoin drifts sideways, but the kindling is piling up
2. Daily & weekly cycle update
3. Rising interest rates could give bitcoin wings
4. Bitcoin strong, despite fundamental headwinds

1️⃣ Bitcoin drifts sideways, but the kindling is piling up

Contribution by Sam

Since the price crashed from 74,000 dollars to 59,000 in early June, it's fair to say the downward momentum has given way to a period of sideways movement; one that has now lasted 2 months.

On the upside, the price is finding resistance mainly between 64,000 and 65,000 dollars, aside from a few brief excursions, and on the downside the same goes for support between 59,000 and 60,000 dollars.

Even though not much seems to be happening on the surface, something is brewing under the hood. Kindling is being stacked up, so to speak. By that we mean higher lows keep getting printed, and on the upside there are also clear spots where a lot of stop-losses from short positions are likely sitting untouched. In the image below, these spots are marked with arrows.

Aside from the fact that there's still no evidence the bear market is over, it's not in bitcoin's nature to kick off a new bull market without at least clearing out a large chunk of these intact so-called swing lows. Sweeping up the liquidity down to 60,000 dollars seems the obvious move, and even a brief dip below the July 1 low wouldn't be strange in this context.

2️⃣ Daily & weekly cycle update

Contribution by Bert

The daily cycle has reached day 56 of an average 60 days. Somewhere in the next two weeks we expect the daily cycle low (DCL). The most likely scenario is a DCL below or equal to the 57,700 dollars of July 1.

I had expected the price to show weakness sooner and to begin its decline toward a deeper bottom. Just look at the blue line drawn earlier on the chart. A clear, deep DCL is welcome because from there you can also look toward the weekly cycle low (ICL) and the yearly cycle low (YCL). That can of course still happen, but the clock is ticking!

The weekly cycle has entered the time window in which a weekly cycle low (ICL) would fit perfectly, just look at the oscillator at the bottom. The fact that the price bounced off the 10-week moving average last week fits well with that.

Saturday marks the start of August, the 45th month of this yearly cycle. A bottom in August fits neatly within the yearly cycle's time window. All in all, the picture that emerges is that a significant bottom in the next two weeks is plausible.

3️⃣ Rising interest rates could give bitcoin wings

Contribution by Thom

Over the past few months, bitcoin has lacked a strong narrative. After the all-time high of October 2025, gold and silver stole the spotlight. That development wasn't good for confidence in the narrative of bitcoin as digital gold. On top of that came the AI hype, which drew attention away from bitcoin entirely.

In the short term, rising bond yields represent a negative force for bitcoin. In theory at least, because bitcoin is a non-yield-bearing asset, which makes dollar assets such as US Treasuries more attractive. Over a slightly longer horizon, however, that could end up working in the digital currency's favor.

For now, Wall Street's focus remains on AI stocks. There's still plenty of enthusiasm about the technology's potential. In the background, though, we see long-term yields climbing; partly due to the rising oil price on the back of the Iran war, but also because of the enormous demand for raw materials driven by the buildout of AI infrastructure.

Those higher capital costs now appear to be raising doubts about the AI investment cycle; will the massive investments ultimately generate enough return to compensate for the higher interest rates?

One theme that has completely faded into the background because of the AI cycle is that of government debt. And rising interest rates are a relevant force there too. Despite the US economy growing solidly, the government is running a relatively large budget deficit.

The national debt keeps mounting, and an ever-larger portion has to be refinanced at rising market rates. That problem is undoubtedly going to move back to the forefront on the financial markets. Probably at a moment when the US economy or the world economy needs support amid a (looming) recession.

While that's not the case right now, in theory it could once again become a moment when a strong narrative emerges for bitcoin. In that respect, it's not a bad thing at all that the bitcoin price is drifting along for the time being and quietly building a bottom.

And if the government debt problem moving to the forefront then also coincides with the approaching bitcoin halving of 2028, that could very well give the digital currency wings at exactly the right moment.

4️⃣ Bitcoin strong, despite fundamental headwinds

Contribution by Thom

The US central bank left interest rates untouched this week. Despite that, we see long-term yields rising and effectively taking over the central bank's job. The US 30-year yield, for instance, climbed to its highest level since 2007 following the rate decision. The market wants to be compensated for the heightened inflation risk, and that shows up in higher long-term yields.

This comes at a moment when the AI complex is under considerable pressure. Many of the past few months' winners have now fallen by 50 percent or more. From South Korea, plenty of reports are coming in about retail investors who blew themselves up with leveraged ETFs on the popular AI stocks.

On top of that, this morning the Financial Times ran a story about the fund of AI wonderkid Leopold Aschenbrenner. While his fund is still sitting on an impressive return, the sentiment has soured considerably.

Predicting the exact bottom is tricky, but based on the enormous price drops from the top, retail investors blowing up, general panic and negativity, I've calmly started scaling in.

Amid all the turmoil in the form of higher (real) interest rates, the threat of war, doubts about the AI investment cycle, and the US central bank's policy, bitcoin is holding up surprisingly well.

Normally, those are conditions under which bitcoin would struggle. In that respect, the relative strength, particularly compared to AI stocks that previously had the momentum, is a positive signal. For now, the 200-week moving average at 63,556 dollars appears to be acting as support for the digital currency.

Combined with the bullish divergence, the higher low for the RSI and the lower low for the price on that same weekly chart, that forms an encouraging signal.

In closing

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