Bitcoin is sucking the blood, how will altcoins perform afterwards?

Reference Source: Bankless

Written by: Golem

In October, Bitcoin's price opened with a downward trend, dropping to around $59,000 at its lowest. However, recently, Bitcoin's price has shown a good rebound, reaching a high of around $68,422 yesterday. With the overall market trend becoming positive, how will altcoins perform in October?

The Bankless analysis team has predicted the price trends of 10 altcoins around October, with 5 tokens being bullish and 5 bearish. This article will summarize the predictions and reasons from the Bankless analyst team, as well as provide a summary of their previous token predictions that expired in October for readers' reference.

October Prediction Success Rate: 70%

Excluding neutral tokens, there are 10 tokens predicted by the Bankless analysis team that expired in October, with the following results:

Predicted bullish but fell: Instadapp (INST) down 43%;
Predicted bearish but rose: Maple Finance (MPL) up 43.56%, BNB Chain (BNB) up 2%;
Predicted bearish and fell as expected: Ondo Finance (ONDO) down 25.28%, Livepeer (LPT) down 27%, ETH Name Service (ENS) down 36.71%, Celestia (TIA) down 1%, Polkadot (DOT) down 36.46%, ether.fi (ETHFI) down 40%, Worldcoin (WLD) down 26.07%.

The most significant discrepancies were seen with Instadapp (INST) and Maple Finance (MPL), while ether.fi (ETHFI) had a higher predicted return. Nevertheless, the overall success rate for the tokens predicted to expire in October remains at 70%.

Bullish Tokens

dYdX (DYDX)

Sector: DeFi
Reason: Launch of a U.S. election prediction market may increase DYDX staking yields
Prediction Period: October 16, 2024, to January 16, 2025
Price at Prediction: $0.96
Price Performance to Date: Up 1.28%

Previously, the Bankless analyst team was bearish on dYdX on July 23 due to concerns over declining usage metrics, and DYDX has since fallen 26%. However, a bullish catalyst has emerged; the recently launched "TRUMPWIN-USD" trading market will allow traders to go long or short on whether Trump can be elected president of the United States with leverage of up to 20 times.

While the extreme volatility of the prediction market may require forced deleveraging or closing winning positions to prevent market bankruptcies before event settlement, it is undeniable that the extreme leverage offered by these contracts will attract a large number of speculators. Although the product has just launched, the demand for presidential prediction markets has surged, and the monthly data for the competitive prediction market Polymarket has doubled; this trend is almost certain to accelerate as the U.S. election approaches.

The yield for DYDX stakers is positively correlated with the growing demand for the dYdX perpetual contract market. Considering that the leveraged U.S. presidential prediction market could be an attractive product, staking yields may increase in the coming weeks, thereby driving up the token price.

Jupiter (JUP)

Sector: DeFi
Reason: Grayscale is optimistic, high product-market fit
Prediction Period: October 15, 2024, to January 15, 2025
Price at Prediction: $0.88
Price Performance to Date: Down 3.66%

On October 10, Grayscale added JUP to its "assets under consideration" list, marking the token as a potential candidate for future investment products.

Jupiter is a full-service exchange deployed on Solana. Its core product is a DEX aggregator that automatically routes users' trades to pools with the best execution prices. Although Jupiter currently does not charge swap fees and its swap smart contracts do hold assets, the exchange processes hundreds of millions of dollars in spot token swaps daily and could easily monetize its order flow at some point in the future.

Despite Jupiter's fully diluted valuation of $9 billion, which is 15% higher than Uniswap, this valuation difference may be due to Jupiter having complementary products, such as extremely high-leverage perpetual futures (with yields up to 28% on $700 million in liquidity) and a strong token launch platform.

Thala (THL)

Sector: DeFi
Reason: Leading protocol in the Aptos ecosystem, can benefit from ecosystem development dividends
Prediction Period: October 7, 2024, to January 7, 2025
Price at Prediction: $0.51
Price Performance to Date: Up 6.14%

Although Aptos has not received attention due to poor performance throughout 2024, there is hope that APT could become the next beneficiary of L1 prosperity, while the ecosystem has performed healthily since mid-September.

Thala (THL) is a comprehensive DeFi application that offers token swaps, liquid staking, and over-collateralized stablecoins. It ranks as the largest investable application and the third-largest protocol by TVL on the Aptos network.

Thala is built using Move, a programming language unique to networks like Aptos and Sui. Although there are competitors on both chains, the protocol's market share is not encroached upon by mature EVM alternatives like Uniswap. Additionally, technically, Thala can also be deployed on Move-based networks (such as Movement).

Aptos (APT)

Sector: L1
Reason: Strong fundamentals
Prediction Period: October 4, 2024, to January 4, 2025
Price at Prediction: $9.13
Price Performance to Date: Up 9.97%

Since the beginning of 2023, Aptos has performed poorly, but the token has seen a recovery after hitting a low in August, doubling in the two months prior to this analysis.

Although Aptos's use cases are not yet mature and its valuation is far above Ethereum's, the on-chain fundamentals of Aptos seem to be showing a positive trend, with a steady increase in the number of daily active addresses and TVL metrics reaching historical highs.

Aptos has a theoretical maximum throughput of 160,000 transactions per second (TPS), making it one of the fastest blockchains in the crypto space, which makes it very suitable for high-performance applications required in emerging crypto fields like DePIN.

Axelar (AXL)

Sector: Infrastructure
Reason: Launch of new cross-chain features, leveraging the recent L1 network boom
Prediction Period: October 3, 2024, to January 3, 2025
Price at Prediction: $0.65
Price Performance to Date: Up 23.15%

Axelar's Mobius Development Stack (MDS) was launched on October 3, utilizing the AXL token as the latest cross-chain interoperability standard, providing a set of open tools and protocols. Its developers claim it will "unlock a whole new design space for full-chain and bring new dimensions to building in Web3."

With Axelar's Interchain Amplifier, new bridging connections between chains can be easily created at the smart contract level without significant protocol changes, allowing the new interoperability standard to natively support Flow, Hedera, Solana, Stacks, Stellar, Sui, and XRP Ledger.

While the AXL token retains utility under MDS and can be bonded as collateral by network validators to process transactions, the structure also allows for revalidation using ETH or BTC collateral to enhance security assurances.

The Bankless analyst team is bullish on AXL's token performance, believing that this interoperability token is well-positioned to ride the wave of recent strong performance from L1 tokens, which may accelerate network exploration and bridging activities.

Bearish Tokens

Uniswap (UNI)

Sector: DeFi
Reason: Still needs bridging, swap experience may be poor
Prediction Period: October 10, 2024, to January 10, 2025
Price at Prediction: $8.35
Price Performance to Date: Down 9.1%

On October 10, Uniswap launched Unichain, a universal rollup built on the OP Stack, aimed at becoming the liquidity center for cryptocurrencies and addressing the inevitable liquidity fragmentation caused by Ethereum's rollup-centric roadmap.

The network intends to leverage a trusted execution environment (TEE) protected by UNI validators, who provide fast pre-confirmations and earn network fees for their services, while reducing user transaction wait times from 1 second to 200-250 milliseconds, and achieving the long-awaited use of UNI as a network gas consumption token.

However, Unichain swaps still require time-consuming bridging transactions, although the native interoperability of the OP Stack is expected to significantly reduce wait times and transaction costs for bridging within the OP Stack.

The Bankless analyst team is bearish on UNI's price because, despite Unichain proposing a grand vision for an interoperable future and empowering UNI, the need for bridging fundamentally creates a worse swap experience. On-chain traders sensitive to profits are unlikely to default to using Unichain for poorer execution and longer wait times, making it hard to imagine what results this experiment will yield other than increased liquidity fragmentation and deteriorating transaction execution.

Wormhole (W)

Sector: Infrastructure
Reason: New airdrop activity lacks incentive appeal, trading volume declines, market may struggle to absorb future token unlocks
Prediction Period: October 2, 2024, to January 2, 2025
Price at Prediction: $0.36
Price Performance to Date: Down 17.48%

In August, the Bankless analyst team was bearish on the performance of the W token. It remains uncertain whether Wormhole's new airdrop activity will incentivize people to adopt the token, while the market may struggle to absorb future token supply.

Although the token price rose throughout the month alongside the overall strength of the crypto market, Wormhole's trading volume plummeted by 36% (to $255 million) from August to September. The token price saw a significant increase just days after BlackRock's blockchain infrastructure partner Securitize announced it would utilize Wormhole for its tokenized asset products.

At the same time, the South Korean exchange Upbit listed the W trading pair on October 2, causing the token price to immediately surge by 30%, but shortly after the trading went live, the price trend began to reverse.

The Bankless analyst team remains bearish on W in October, expressing skepticism about the benefits of the upcoming Wormhole airdrop incentive program, doubting whether the high-profile partnership announcements can reverse the decline in trading volume, and believing that the FOMO triggered by the Upbit listing will be short-lived.

EigenLayer (EIGEN)

Sector: Infrastructure
Reason: The token is overvalued, and the actual yield of AVS may be poor
Prediction Period: October 1, 2024, to January 1, 2025
Price at Prediction: $4
Price Performance to Date: Down 16%

At the time of analysis, EIGEN's trading market cap was $740 million, with a fully diluted valuation close to $6.7 billion. Although restaking is touted as the future of security in the crypto economy, EigenLayer's high valuation may struggle to justify itself in the coming months.

From a fundamental perspective, EigenLayer and its applications will inevitably be valued for their revenue-generating capabilities; while these figures cannot be determined without real-time AVS, the profit prospects of the entire EigenLayer ecosystem are also questionable.

Even in the most optimistic scenarios, leading AVS may only generate a few percentage points of actual yield. Crypto investors will need to absorb the token inflation rate used to subsidize low returns, which is an inherently unsustainable balance, especially for new services with little or no real-time integration.

ether.fi (ETHFI)

Sector: LST
Reason: The token is overvalued, and the market may struggle to absorb subsequent large explanations
Prediction Period: September 30, 2024, to December 30, 2024
Price at Prediction: $1.82
Price Performance to Date: Down 8.24%

In July, the Bankless analyst team was bearish on ETHFI, predicting that the outflow of TVL funds would be used to chase other airdrop opportunities and allocate more tokens, which would weaken the growth hopes supporting ether.fi's high valuation and lead to a decline in the token price.

However, ether.fi did not lose market share and TVL to competitors; instead, it successfully increased its deposits by creating novel restaking tokens and ongoing airdrop programs. Nevertheless, its permanent token issuance policy has had a significant negative impact on the price. The ETHFI team's and investors' unlocking plan will begin on March 17 next year, an event that will certainly attract the attention of many holders in 2025. While the airdrop incentives have proven successful in retaining deposits, ether.fi's trading fully diluted valuation is higher than Lido.

The Bankless analyst team remains bearish on ETHFI's price, believing that considering the token's extreme overvaluation relative to LDO, the market will struggle to absorb its ongoing airdrop issuance.

Solana (SOL)

Sector: L1
Reason: Ecosystem stagnation, performance may lag behind other L1s
Prediction Period: September 26, 2024, to December 26, 2024
Price at Prediction: $156.15
Price Performance to Date: Down 1.84%

On June 21, the Bankless analyst team began to be bearish on SOL, predicting that the fading fantasy of the ecosystem's meme coins would lead to poor performance in the coming months.

In hindsight, the timing of this prediction was not ideal, as it was issued just days before SOL rebounded from its range low. Despite multiple retests, SOL remained at that range low in the following months, during which the ecosystem was noticeably indifferent.

Since the overall cryptocurrency market peaked in March, Solana's TVL has been stagnant. Network fee revenue has been on a downward trend, and although its native token has outperformed mature meme tokens (i.e., BONK and WIF) in recent months, this is also a warning sign that the ecosystem's golden age may be over. This is a concerning outlook for a token that relies on strong investor performance.

The Bankless analyst team maintains a bearish view on SOL, believing that the relative attractiveness of other L1s will increase in the foreseeable future, thereby undermining investor confidence in the Solana narrative.

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