Many people say that the market value of Bitcoin is already so large, how much can it increase?
Only by buying stocks with low market value can you expect a big increase in price.
The market sometimes does act in accordance with this view.
But this logic is wrong.
There is no necessary relationship between a large market value and how much the stock price will rise. As long as the target is good, a lot of money comes in, and no one sells, the stock price will rise regardless of how high the market value is.
If this target is not popular and funds do not come in, it will still fall even if its market value is only 1 million.
Why do many people like to be keen on local dogs and coins in the primary market? The characteristics of these coins are that the market value is low and they rise quickly, and can increase dozens of times in an instant.
If you don’t make dozens of times the money, you don’t seem like someone who’s in the cryptocurrency world.
What you need to understand when making money by speculating in cryptocurrencies is not the technology of the underlying asset, but its fundamentals.
Many people who teach cryptocurrency trading teach people how to analyze the project itself, but what they themselves do is actually short-term emotional trading, which is a contradiction.
All teaching of analysis projects are useless and will not make you money.
The key to understanding is to understand which stage of the cycle it is in. Understand human nature, market changes, cycle ebbs and flows, and your own personality.
This is not something that anyone can teach you. You have to realize it yourself and integrate knowledge and practice.
The fastest shortcut is to observe successful people and then imitate them. Gain experience through experience. This is the value of social learning experience in the cryptocurrency circle.
Everything in the world has a cycle, just like the seasons of the year, spring, summer, autumn and winter. Spring is for sowing, summer is for waiting, autumn is for harvesting, and winter is for storing.
Looking at the cryptocurrency circle again, the first stage is the waiting period for shocks, the second stage is the period of explosive rise, the third stage is the period of chip distribution, and the fourth stage is a decline, which is the period for retail investors to cut into each other.
If you want to make money, you can only start buying at the beginning of the second stage.
How to know which index is in the second stage? If the previous high before breaking the new low exceeds 30%, it is considered the initial stage of the possible upward burst period.
The fundamental reason for losing money in cryptocurrency trading is that most people buy in during the chip distribution period, and then firmly believe in covering their positions in the fourth stage. If you buy Bitcoin, it’s okay, you can get it back in 4 years, but if you buy other currencies, very few can get it back.
There are small cycles within the big cycle.
The cryptocurrency industry has a major cycle of 4 years.
There are at least 1-2 small cycles like this in a year. Even in a bear market, there are small cycles every year.
Why there must be cycles? Because the market needs to develop. The contradiction between losing money and making money drives the development of market trends. This is the law of development of things.
Cycles make people make and lose money. In the third stage of a real bull market, at a glance, most coins can indeed rise, the only difference is how much they rise and how little they rise.
In the small cycle, only some coins increase a lot, such as the previously hyped brc20, rune stone, and sol meme.
In the small cycle stage, the fact is that stocks with low market capitalization can double very quickly, possibly several times a day.
This happens only when market funds have nowhere to go and the only sector in the market is a new sector.
The market value of the currencies in this new sector is very low, and once the funds come in, they are pulled up.
Funds basically come and go quickly. Let's look at the previous BRC20. Except for Ordi, who still remembers BTC, CSAS, RATs, and TURTS? Even SATs are almost forgotten. If you play BRC20, Ordi may make you lose the least money. But it has also fallen by 60%+ from the high point.
The price has risen so much not because of its low market value.
It is precisely because the funds saw the big rise here and had nowhere else to go, so they gathered here and pulled all of these up.
Stocks with low market capitalization are particularly likely to increase in value, so people assume that if they want to buy, they should sell stocks with low market capitalization, because they have increased in value the most.
If a sector has thousands of coins, all of which have small market capitalizations, and funds are dispersed after entering, there will be no opportunity to get rich quickly.
However, when a sector has no hot spots and its market value is very low, if you say you will buy stocks with low market value and expect them to rise more in the future, this idea is very dangerous.
Once you buy, the price will basically keep falling, because the project party that develops the token wants to make money, so they can only rely on continuous selling of tokens and rely on people to take over later, and the result is a fall.
Therefore, it is a wrong logic that the lower the market value, the more it increases.
The correct approach is to buy the leader in the sector and the stock with the largest market capitalization.
In the end, if it can help you lose less money or make a lot of money, it must be the leader.