Amid the turbulence that rocked cryptocurrency markets in April, Daniel Yan, the Chief Investment Officer of Kryptanium Capital, has a clear vision for May’s trading strategies.
He focuses on artificial intelligence (AI), Solana, and meme coins as potential leaders for a rebound.
AI, Solana, Memes to Lead May Catchup Trade
A blend of macroeconomic triggers and market dynamics marked April’s crypto crash. The US’s persistent inflation and hot labor market led to a significant selloff in US treasuries, impacting cryptocurrencies that are sensitive to such macroeconomic factors. Additionally, the behavior of the spot Bitcoin ETFs, which, contrary to expectations, acted more as a trading instrument than a stable investment, contributed to April’s downturn.
Altcoins suffered acutely due to poor liquidity and heavy unlocking schedules, leading to a dramatic drop not seen since the tumultuous events of 2022.
“The medium performer of the top 100 tokens on CoinMarketCap in April saw a decline of 33%, compared with a milder 15.5% dip for Bitcoin and Ethereum,” Yan explained.
Altcoins Market Cap. Source: TradingView
However, after a series of positive macroeconomic updates, Yan sees a silver lining. The introduction of the US Treasury Department’s first bond buyback program since 2002 and a dovish statement from the Federal Open Market Committee have helped stabilize the crypto market. These factors contributed to Bitcoin’s over 10% rebound in just a few days.
Looking into May, Yan predicts it to be a “very macro month for crypto.” He expects market stability until the mid-month Consumer Price Index report, likely influencing market direction. Specifically, Yan is bullish on categories like Solana, AI-driven coins, and meme tokens.
“Solana category, AI category and Memes category are my top picks for the catchup trade – they should outperform Bitcoin in May. In general, I don’t think the theses for a very bullish 2024 is challenged at all. However, the April crash is a great lesson to all market players,” Yan asserted.
Despite April’s challenges, Yan remains optimistic about the long-term prospects of cryptos, viewing the recent crash as a crucial lesson for market participants.
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