Altcoin market is dynamic, metaverse and DeFi stocks are recommended investments

As the entire crypto market has regained its composure, the altcoin market is beginning to offer new investment opportunities. In particular, metaverse-related stocks and the DeFi (decentralized finance) sector are showing multiple bullish signals and are attracting attention as recommended altcoin stocks. As Bitcoin’s volatility shrinks, investors are accelerating their rotation into the altcoin market.

Changing Market Conditions: Background to Reduced Bitcoin Volatility

Bitcoin (BTC) has recovered from the intense price volatility caused by recent policy concerns and is currently hovering around $83.69K. The 24-hour high price was $89.90K, while the lowest price was $83.38K, with a 24-hour decrease of -6.38%.

With this price action, the 30-day implied volatility (IV) has dropped from a recent high of 44.3 to 40.62, suggesting that hedging demand in the options market is cooling. Meanwhile, Bitcoin’s Open Interest (OI) has decreased by 0.34% in the past 24 hours, while the price has risen by 0.84%, suggesting profit-taking by short position holders and a lack of immediate futures demand among buyers.

As policy uncertainty eases, the stock market rebound has spilled over across risk assets, causing investors to shift from safe-haven assets to altcoins and cryptocurrencies with higher yields.

Altcoins to Watch: The Vitality of the Metaverse Sector

Metaverse-related altcoin stocks lead the market. The Sandbox (SAND) has recorded a decline of -8.55% in the last 24 hours, reflecting a broader altcoin correction. However, the Metaverse Select Index remains showing solid movement, maintaining the medium- to long-term growth potential of the sector as a whole.

Axie Infinity (AXS) has experienced a decline of -13.71% in the last seven days, but the correction phase may have come full circle as short position holders are taking profits as the funding rate turns negative. Such price movements in altcoin stocks suggest that the maturation of the metaverse gaming industry and selective buying by investors are progressing simultaneously.

Long-term Outlook for DeFi and Emerging NFT Stocks

The decentralized finance (DeFi) market continues to be strong, with stablecoin-led total value locked (TVL) continuing a clear upward trend. This contrasts with TVL fluctuations in 2023 (which surged precariously to $176 billion and then plummeted to less than $50 billion in a few months), indicating that the current DeFi altcoin market is forming a more stable growth foundation.

Privacy tokens DASH and MIDNIGHT have recorded declines of -8.82% and -5.25%, respectively, marking a continued correction in the privacy-enhanced altcoin market. On the other hand, ZEC (ZEC) has been relatively solid, with a decrease of -2.69% in the last seven days.

Pudgy Penguins has emerged as the most powerful NFT-related altcoin in this cycle, demonstrating its evolution from a mere digital commodity to a diversified consumer IP platform. The blockchain game “Pudgy Party” has achieved 500,000 downloads in just two weeks, and the PENGU token has been airdropped to over 6 million wallets, and its user base is expanding rapidly.

Bullish Signals Shown by the Derivatives Market

The crypto derivatives market is sending out multiple bullish signals. Bitcoin’s long/short ratio has risen significantly from last week’s low of 1.18 to 2.04, clarifying investors’ bullish bias.

Funding rates in most cryptocurrency trading pairs remain positive, with margin long-term position buying dominating. This suggests continued buying pressure in the altcoin market, indicating that there are opportunities to invest, particularly in the metaverse and major altcoin stocks.

CoinMarketCap’s Altcoin Indicator Rises

CoinMarketCap’s “Altcoin Season” indicator has risen from 26/100 to 29/100, indicating the increasing relative strength of the altcoin market. This rise is driven by the dynamism of the metaverse sector, led by XRP (Ripple) and BNB (Binance Coin).

XRP is currently showing a 24-hour decline of -6.73%, while BNB (BNUB) is equally or slightly more resilient than Bitcoin (-6.38%) at -5.22%. Such movements in altcoin stocks suggest that portfolio adjustments by institutional investors continue.

Upcoming Altcoin Investment Strategies

Even as spot crypto trading volume has halved from $1.7 trillion last year to $90 billion, the altcoin market is beginning to show selective strength. Considering the good news brought about by Bitcoin miners’ conversion to the AI infrastructure business, the steady growth of DeFi, and the medium- to long-term potential of metaverse and NFT stocks, there are still investment opportunities in the altcoin market.

The recommended altcoin investment approach is to combine the sector’s entry into a recovery phase after a medium-term correction in metaverse-related stocks, stable returns from DeFi stocks, and strategic placement in emerging NFT-related altcoins. As long as the bullish signals in the derivatives market persist, the uptrend in the overall altcoin market is likely to continue.