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On Thursday, major cryptocurrencies took a step back as traders processed the latest economic data from the United States, alongside earnings reports from tech giants Microsoft and Meta. This has led investors to look for the best crypto to buy during this market dip.
Market Overview
Bitcoin (BTC) experienced a decline of 2.7%, trading just above $70,000. This pullback followed its recent upward momentum and efforts to test its all-time highs in the $73,000 range. Traders appear to be cashing in on profits after Bitcoin made significant gains.
The performance of large-cap stocks on the US stock market weighed on broader risk sentiments. Despite reporting better-than-expected earnings, Microsoft and Meta’s forecasts regarding increasing AI-related expenses have unsettled some investors. Microsoft revealed a staggering increase in spending, reaching $20 billion in the first fiscal quarter, aimed at expanding its AI data centers to meet soaring demand. During Meta’s earnings call, CEO Mark Zuckerberg addressed these rising costs with caution.
Economic Indicators and Fed Outlook
Recent US economic data has generally suggested that the country might achieve a so-called “soft landing,” where inflation could decrease to 2% without triggering a recession. September’s Core PCE inflation figure came in at 0.3%, aligning with expectations, while the Employment Cost Index for Q3 showed that wages increased by 0.8% quarter-over-quarter. Strong personal spending figures for September also contributed to this sentiment.
This data strengthens the argument for the Federal Reserve to consider a 25 basis point interest rate cut in the upcoming meetings, as reflected by the current market expectations tracked by the CME’s Fed Watch Tool. However, traders will keep a close eye on Friday’s jobs report, which could potentially alter these expectations—a surprisingly strong report might reduce the likelihood of rate cuts, impacting the crypto market negatively.
Political Climate and Crypto Potential
The political landscape could also play a role in crypto movements. Former President Donald Trump, who has expressed pro-crypto sentiments, appears to be gaining momentum ahead of next week’s presidential election. This development has been suggested as a potential catalyst for driving major cryptocurrencies to new yearly highs amid market fluctuations.
Currencies to Watch
As the market fluctuates, investors are keenly assessing which cryptocurrencies to target now for optimal future gains. Here are a few notable mentions:
Ethereum (ETH)
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is facing headwinds, down over 5% in the past 24 hours compared to Bitcoin’s 2.4% dip. ETH is currently trading just above $2,500, nearly 40% off its yearly highs. Key indicators such as the ETH/BTC ratio and Ethereum’s market dominance suggest a downturn, hitting three-and-a-half-year lows.
Challenges for Ethereum include diminished demand for spot ETFs, lackluster on-chain activity, and increased competition from blockchain rivals like Solana. Nevertheless, Ethereum remains the leading platform in decentralized finance (DeFi), commanding more than 50% of Total Value Locked (TVL) within the DeFi ecosystem. If cryptocurrencies start to rally towards new yearly highs before year-end, a narrative shift may occur, positioning ETH as a potentially undervalued asset.
Kaspa (KAS)
Kaspa (KAS) has emerged as a standout performer, showing resilience with a 3% gain in the past 24 hours. Currently trading around $0.1150, it has retracted over 45% from its record highs above $0.20 reached in late July. Kaspa has established solid support levels and could be poised for a rapid rebound, potentially doubling in value if a broader market recovery takes shape.
Raydium (RAY)
Another noteworthy mention is Raydium (RAY), a leading decentralized exchange (DEX) on the Solana network. RAY has performed well, gaining 3% amidst the overall market downturn. The token experienced a surge in trading volumes recently, reaching its highest prices since early 2022, only to pull back to approximately $3.15, still significantly lower than its 2021 all-time highs. Investors optimistic about Solana’s future might see RAY as a promising investment opportunity.
Additionally, the growing interest in Solana’s ecosystem opens doors for high-potential meme coins, which could yield substantial returns as market dynamics evolve. Investors are encouraged to watch for emerging trends in the meme coin market as they search for the next potential 50x opportunity.
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