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2024 Altcoin Gems To Follow And Pitfalls To Avoid

Last Updated December 26, 2023 11:57 AM
Andrew Kamsky
Last Updated December 26, 2023 11:57 AM

Key Takeaways

  • Chainlink (LINK) connects smart contracts to real-world data, boasting solid fundamentals and bullish indicators.
  • Algorand (ALGO) is performing against the USD market with an efficient blockchain and solid fundamentals for growth versus Bitcoin.
  • Solana (SOL), offering its hybrid consensus and fast transactions, is attracting investors for ongoing success.
  • Due to extended bearish trends, Litecoin (LTC) faces doubts in both BTC and USD markets.
  • IOTA (MIOTA) struggles in the BTC and USD markets, requiring substantial developments to reverse its course.

3 Altcoins To Watch In 2024

Before delving into the analysis of the presented opportunities, it’s important to note that the charts used for this article include Heikin-Ashi candles. Unlike regular Japanese candlesticks, Heikin-Ashi candles are designed to filter out market noise. They achieve this by averaging price data from two consecutive periods, creating a smoother visual representation. 

Using Heikin-Ashi candles helps identify trends and potential reversals more clearly, as it reduces the impact of short-term price fluctuations and market volatility commonly seen in standard candlestick charts. 

1.0 Chainlink (LINK)

What Does Chainlink Do?

Chainlink is a decentralized oracle network that aims to connect smart contracts with data from the real world. It acts as a bridge between blockchain smart contracts and external data sources. 

The primary use of Chainlink is to provide reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain. Chainlink enables smart contracts to interact with external data feeds, events, and payment methods, providing the critical off-chain information needed for complex contracts to become the dominant form of digital agreement.

Tokenomics Of Chainlink

Chainlink’s native token is LINK. This token is used to pay for services on the Chainlink network. The LINK token is an ERC-677 token, an extension of the ERC-20 standard, which allows tokens to contain both value and data. 

It has a circulating supply of 556,849,970 LINK coins and a max. supply of 1,000,000,000 LINK coins.

LINK Technical Analysis

LINK is currently positioned in a bullish posture on the monthly time frame, evidenced in its performance against BTC and EUR. 

The significant technical development for LINK is its breakout from a longstanding downward trend of 37 months versus Bitcoin. This breakout suggests that Link is now appreciating at a faster rate than Bitcoin, a key indicator of its strengthening market position. 

LINK/BTC Breakout
LINK/BTC Breakout

In Link USD pairing, LINK has emerged from an extensive accumulation phase spanning 579 days, further reinforcing its bullish momentum. This technical progress is supported by robust fundamentals, including implementing the Cross-Chain Interoperability Protocol (CCIP) and strategic partnerships with notable entities like SWIFT. 

These fundamental factors lend credence to the technical analysis, suggesting a positive trajectory for LINK in the cryptocurrency market.

LINK Technical Analysis

2.0 Algorand (ALGO)

What Does Algorand Do?

Algorand is an autonomous, quantum-resistant, decentralized, blockchain-based network that supports various applications. These systems are secure, scalable, and efficient, all crucial for practical, real-world applications. Algorand will support computations that require reliable performance guarantees to create new forms of trust operating on a pure proof-of-stake (PPOS) consensus mechanism. 

The primary use of Algorand is to enable faster transactions and a decentralized network that does not fork. It is designed to process many transactions quickly with immediate finality, meaning transactions are finalized as soon as they are added to the blockchain. This makes Algorand an attractive platform for various applications, including finance, DeFi, and instant payments.

Tokenomics Of Algorand

Algorand’s native token is ALGO. The tokenomics of ALGO hold a circulating supply of 8,006,088,423 ALGO coins and a max. supply of 10,000,000,000 ALGO coins. ALGO supply cap ensures scarcity and a potential value appreciation over time. 

The distribution of ALGO tokens is designed to support the long-term sustainability and decentralization of the Algorand network. 

ALGO Technical Analysis

The current technical indicators suggest that Bitcoin might still be a better hold compared to ALGO. This assessment is based on the continued downtrend observed in the ALGO/BTC pairing. 

The persistence of this downtrend indicates that, from a technical standpoint, ALGO has not yet shown significant momentum or reversal patterns that could challenge Bitcoin’s relative strength. 

Upon close examination of the most recent monthly Heikin-Ashi candle, it’s noteworthy that an upper wick is present, which wasn’t the case in the preceding candles. This upper wick is information that should be considered, suggesting a potential start of a trend reversal or, at minimum, a. move to the upside. 

The presence of an upper wick in Heikin-Ashi candles typically signifies buying pressure showing up, which may be interpreted as a preliminary signal of a shift in market sentiment, indicating the onset of a bullish trend following an extended period of bearish momentum.

ALGO/BTC Breakout
ALGO/BTC Breakout

When considering the USD/ALGO pairing, the scenario is more optimistic. Algorand has shown considerable movement from its all-time low (ATL) of $0.094, which had declined by 96% from the ALGO all-time high (ATH) of $3.26. 

Currently, the price is oscillating between $0.14 and $0.12; ALGO has already experienced a 40% recovery from its ATL. This recovery is a bullish signal on the USD monthly time frame.

Considering Algorand’s strong fundamentals, there’s a reason to believe that its price could recover to at least half of its previous ATH of $3.26. 

ALGO Technical Analysis
ALGO Technical Analysis

This projection would position Algorand as a viable option for traders or investors looking for significant upside potential versus the USD. 

The fundamentals, combined with the current technical setup, especially in the USD market, present Algorand as an opportunity for a potentially profitable trade, assuming a continued positive trajectory and market support.

3.0 Solana (SOL) 

What Does Solana Do?

Solana is a high-performance, decentralized blockchain platform utilizing a unique hybrid consensus model combining proof-of-history (PoH) and proof-of-stake (PoS)

Solana offers rapid transaction processing and an optimized network structure. Solana’s primary function is to facilitate ultra-fast transactions and smart contracts, making it a powerful platform for decentralized applications (dApps), decentralized finance (DeFi) solutions, and cryptocurrency trading. 

Solana’s ability to process transactions quickly and with low fees has made it a popular choice for applications requiring high throughput, such as gaming, NFTs, and high-frequency trading systems.

Tokenomics Of Solana

Solana’s native token is SOL. The tokenomics of SOL feature a circulating supply of 423,139,902 SOL coins, while the max supply is not available due to its inflationary token model. 

This inflation is designed to decrease gradually until a fixed long-term inflation rate is achieved. SOL tokens are used for transaction fees and staking within the Solana network, essential in maintaining and operating its ecosystem.

Solana Technical Analysis

The SOL/BTC pairing exhibits a bullish trend, breaking out after a prolonged 21-month downward trend. This breakout is particularly notable due to the strong buying power observed in the last two months, indicating robust investor confidence in Solana compared to Bitcoin. 

The shift in market sentiment has resulted in Solana outperforming Bitcoin significantly.

Since this breakout, Solana has appreciated an impressive 140% against Bitcoin. 

This substantial gain suggests a strong momentum likely to propel SOL upward into the 2024/2025 period. The sustained buying interest and the break from the previous downtrend are critical indicators of Solana’s potential for continued appreciation in the BTC pairing.

SOL/BTC Technical Analysis
SOL/BTC Technical Analysis

Turning to the SOL/USD pairing below, Solana also displays a robust bullish signal here. SOL was in an accumulation phase for an entire year, indicating a period of sideways movement where the price was relatively stable, and investors were actively acquiring the coin. 

However, Solana has made a decisive move out of this accumulation range, currently trading around $50 USD. This breakout from the range is a significant move to the upside, suggesting a shift in market dynamics.

SOL Technical Analysis
SOL Technical Analysis

The bullish trend in both the SOL/USD and SOL/BTC pairings provides a strong case for Solana as an attractive investment for the upcoming bull market. 

The concurrent bullish behavior in both pairings reinforces the notion that SOL is gaining widespread market approval and could be a valuable asset as we move deeper into the bull market cycle.

Possible Altcoin Pitfalls In 2024

1.0 Litecoin (LTC)

What Does Litecoin Do?

Litecoin is a peer-to-peer cryptocurrency that was created by Charlie Lee in 2011 as a fork of Bitcoin. It’s designed to be a faster alternative to Bitcoin. 

The network operates on a decentralized blockchain, ensuring transaction transparency and security. Litecoin distinguishes itself with its quicker block generation rate, which leads to faster transaction confirmation times.

Litecoin employs a different proof-of-work algorithm called Scrypt, which is less complex than Bitcoin’s and allows for more accessible mining to individual users. The network aims to process a block every 2.5 minutes, compared to Bitcoin’s 10 minutes, which makes Litecoin’s blockchain one of the fastest among major cryptocurrencies.

Tokenomics Of Litecoin

Litecoin’s native token is LTC. The tokenomics of Litecoin involves:

  • A maximum supply cap of 84 million coins.
  • Exactly four times the total supply of Bitcoin.
  • Reflecting its positioning as a ‘lighter’ version.

This cap ensures scarcity and supports potential value appreciation over time. Litecoin’s halving event, which halves the reward for mining new blocks, occurs approximately every four years, a process similar to Bitcoin, intended to control inflation and extend the coin’s distribution over a longer period.

Litecoin’s wide acceptance, with its faster transaction speeds and lower fees compared to Bitcoin, makes it a popular choice for individual and merchant use in the cryptocurrency ecosystem.

Litecoin Technical Analysis 

The LTC/BTC pair has been in a prolonged down trend for approximately 69 months, indicating that holding Bitcoin has been more advantageous than holding Litecoin for about 5.75 years. 

LTC/BTC Technical Analysis
LTC/BTC Technical Analysis

Litecoin Vs. BTC Bear Case 

During this period, Litecoin has depreciated by 92% against Bitcoin, illustrated in the above chart. This significant depreciation suggests that, while LTC might currently present a potentially attractive buying opportunity, it also carries risk that it can further decline against Bitcoin. 

Therefore, it would be prudent for traders and investors to monitor this chart closely for any signs of reversal patterns before committing to a long position in Litecoin. 

Litecoin Vs. BTC Bull Case

If LTC does turn around, a purchase of LTC for BTC at this level could see an excellent opportunity for a positive trade. 

LITECOIN Technical Analysis
LITECOIN Technical Analysis

Litecoin Vs. USD Bull Case

When analyzing the LTC/USD pairing since 2018, the price action shows a series of four higher lows, suggesting an uptrend and potential for further price appreciation, at least in the short term, to $95-$105 from its current price of circa $70. A trade-in LTC could yield a 50% return, significantly if the price exceeds the $100 mark. 

Should the $100 mark level be broken and this level used as support, it may signal a shift toward a bullish trend for Litecoin in the longer term, even when paired with the USD. However, this scenario remains speculative, and various factors need to align for this prediction to materialize. 

Investors should remember that if LTC genuinely is digital silver in properties compared to Bitcoin’s digital gold, Litecoin can potentially appreciate significantly in price, making it an exciting or undervalued altcoin once the market realizes the coin’s inherent store-of-value properties in the crypto market.

Litecoin Vs. USD Bear Case

If Litecoin breaks below the yellow trend line and closes below it on the monthly chart, particularly in the price range of $64 to $42, it would paint a bearish outlook for the cryptocurrency moving forward. 

This break and close below the trend line would signify a significant shift in market sentiment and momentum, indicating that sellers are overpowering buyers. 

Such a move could lead to further downward pressure on Litecoin’s price, potentially triggering a more pronounced bearish trend in the market. 

2.0 Internet Of Things (IOTA)

What Does IOTA Do?

IOTA, launched in 2015, is a cryptocurrency designed specifically for the Internet of Things (IoT). It uses a unique structure called the Tangle, a directed acyclic graph, instead of a traditional blockchain, allowing for fee-less and scalable transactions. 

IOTA’s Tangle enables faster transaction processing by having each transaction confirm two previous ones, thus eliminating the need for miners and reducing energy consumption.

Tokenomics Of IOTA

IOTA’s native token is MIOTA, with a fixed supply of 2,779,530,283 MIOTA. All tokens were pre-mined and distributed at the network’s inception. The absence of transaction fees and a stable, non-inflationary supply make MIOTA well-suited for microtransactions within the IoT ecosystem.

As IOTA’s technology gets integrated into more IoT applications, the fixed supply of MIOTA has positioned the crypto coin to experience a potential value appreciation. However, this has not been the case over the last few years. 

IOTA Technical Analysis

The technical perspective of IOTA, when paired against Bitcoin, paints a bleak picture. Since 2017, IOTA has seen a 99% fall in value relative to Bitcoin. This significant decline indicates a persistently bearish trend over an extended period. 

The continuous downward trajectory since 2017 raises concerns about the project’s momentum and market appeal compared to the leading cryptocurrency. 

From a technical analysis standpoint, it becomes challenging to anticipate a bullish reversal in the IOTA/BTC pairing without substantial developments or shifts within the IOTA ecosystem. The data suggests that the outlook remains predominantly bearish unless the IOTA project announces significant changes or innovations.

IOTA/BTC Technical Analysis
IOTA/BTC Technical Analysis

The situation is similar when analyzing IOTA against the U.S. dollar (USD). IOTA has depreciated by 97% since its 2017 peak, indicating a sustained bearish trend in this pairing. 

The current market posture of IOTA continues to align with bearish sentiment, showing no significant signs of recovery or upward momentum. This prolonged decline in value reflects investor skepticism and a lack of substantial progress or adoption of the IOTA platform. 

IOTA Technical Analysis
IOTA Technical Analysis

The outlook for IOTA in the USD market also hinges on the project’s future developments and potential positive news from the IOTA team, which could inject optimism into the market. 

Without such catalysts, the technical analysis suggests that IOTA may struggle to regain its past highs and continue languishing in its current bearish state.

Conclusion

The altcoin sector presents distinct opportunities and pitfalls. Chainlink is a decentralized oracle network that exhibits positive signs driven by technical and fundamental factors. 

Algorand, known for its fast and efficient blockchain, holds potential, especially in the USD market, supported by solid fundamentals. With its hybrid consensus model, Solana is on an upward trajectory, appealing to investors in both BTC and USD pairings.

Conversely, Litecoin faces a prolonged bearish trend against Bitcoin, and its future remains uncertain in both USD and BTC pairings. IOTA, designed for the Internet of Things, has experienced significant value depreciation and requires substantial developments to reverse its bearish trend.

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine” – Benjamin Graham

The above quote perfectly encapsulates the dual nature of the market’s short-term sentiment-driven fluctuations and its long-term fundamentals-based valuation, a fundamental understanding for investors navigating the dynamic and evolving cryptocurrency landscape.

FAQs

What is Chainlink and why is it considered a promising cryptocurrency in 2024?

Chainlink is a decentralized oracle network that connects smart contracts with real-world data. It’s promising in 2024 due to its role in enabling reliable and tamper-proof data inputs for complex smart contracts, positive technical analysis, and strong fundamentals.

What are the key technical and fundamental factors driving Algorand’s potential, especially in the USD market?

Algorand’s potential in the USD market is driven by its fast transaction processing, absence of forks, and suitability for applications like DeFi and instant payments. Key factors include its technical analysis and strong fundamentals.

Why is Solana gaining traction among investors, and what factors contribute to its bullish outlook in both BTC and USD pairings?

Solana’s rapid transaction processing, low fees, and hybrid consensus model make it attractive. It has a solid bullish outlook due to its positive technical analysis, sustained buying interest, and strong fundamentals in both the BTC and USD markets.

What challenges does Litecoin face in its performance against Bitcoin, and what potential scenarios exist for its price movement in USD and BTC markets?

Litecoin has faced a prolonged bearish trend against Bitcoin, which has depreciated significantly. The USD market shows potential for price appreciation, but it depends on factors like adoption and market sentiment. However, its future remains uncertain in both USD and BTC pairings.

What are the main challenges facing IOTA’s performance in both BTC and USD markets, and what could potentially drive a turnaround in its value?

IOTA faces challenges due to its prolonged bearish trend in both BTC and USD markets, reflecting skepticism and limited adoption. A turnaround would require significant developments, positive news, and increased adoption within the IoT ecosystem.

Disclaimer

The content of this article is provided for informational purposes only and does not constitute financial advice, investment advice, trading advice, or any other sort of advice. The views, thoughts, and opinions expressed in the article are solely those of the author and should not be taken as an endorsement or recommendation for any investment strategy or financial decision. Cryptocurrency investments are subject to high market risk, including the potential loss of principal. 

Readers are strongly encouraged to conduct their own independent research and consult with a qualified financial professional before making any investment decisions. The author and publisher of this article are not responsible for any financial losses or gains incurred as a result of any investment activities based on the information provided herein. 

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