Crypto strategist Scott Melker says he’s now long on seven altcoins.
The trader, also known in the industry as the Wolf Of All Streets, names two large-cap coins and three medium-cap coins that he believes have the potential to print gains as a new altseason commences.
“I am presently long ADA (Cardano), EOS, ETH (Ethereum), LTC (Litecoin), and XRP (fraction of original position after hitting target) with low leverage… This quick alt season could end anytime, so I am going after it while I can.”
The crypto analyst is also looking at Polkadot (DOT), which he says is starting to show signs of bullish momentum.
“RSI broke resistance, usually price follows. I am already in this on that massive bullish divergence, but this could really go if Bitcoin allows it.”
As for decentralized finance assets, Melker notes that he’s also bullish on lending protocol Compound (COMP).
Melker thinks that the seven altcoins have room to run as long as the Bitcoin dominance index, which traders rely on to predict whether altcoins are poised to outperform BTC, stays below 66.35%.
“Bitcoin dominance potentially breaking support here. If this continues, we will have at least a continued opportunity in the short term to trade altcoins. If it keeps going down, full-blown alt season.”
Looking at the long-term timeframe of the Bitcoin dominance index, Melker marks 63% as a crucial level for altcoins.
“The weekly candle was looking likely to break through key descending resistance. Now it is back below. Rejection here on the weekly and alts will continue to fly.”
Although altcoins are starting to show signs of strength, Melker remains long-term bullish on BTC as he expects the largest cryptocurrency to experience a sell-side liquidity crisis amid strong institutional demand.
“Grayscale is buying more Bitcoin than is being mined. Cash app and PayPal are soon to be doing the same. That is just three companies. Imagine when every company wants exposure. And you do as well. Supply-side shock is a near certainty.”
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