If you blindly chase the hot topics and follow the speculative coins, it will be difficult to keep up with the market.
Just like the previous inscriptions, ordi's sudden explosion attracted many people to the inscription sector, with many fantasizing about laying out for the next ordi to become wealthy.
As a result, various strange coins of the inscription series were launched. I remember that at that time, sats was saying it was the next ordi, but those who bought in never saw this coin rise.
History is constantly repeating itself. After the inscriptions, there will be other emotional hot sectors appearing to attract retail investors.
The purpose is simple: to let retail investors see the wealth myth and attract them.
So, what has been the hottest in recent months? Of course, it’s the meme series.
The hottest in the meme series is pepe, which has driven the entire meme wealth myth.
For such coins, before they rise, no one can know about them because they are entirely new sectors. Only when they rise dozens or hundreds of times will people start to pay attention, and all sorts of narratives will emerge.
So, there are very few people who make money from pepe, but many will pay attention to this sector and buy other coins in the meme series.
As a result, it was found that the vast majority of coins have not risen, and some have even fallen. Although the recent market has been rising, those coins in the meme series are still falling.
Why is this? Because with the signs of a peak in pepe's market, it means that the main forces are starting to exit. The exit of the main forces means that the funds in this sector are withdrawing.
In this situation, those small market cap coins, which have no intrinsic value, only increase the risk.
Actually, I reminded about the risks of pepe in mid-year. Although it has recently broken historical highs and many people think it will rise further, in my opinion, this breaking of new highs poses a greater risk.
If it doesn't break, it's actually fine; everyone is still observing. But if it breaks, many people will think a new trend is about to start.
But in fact, if we look at the overall market, we will find signs.
Clearly, the first round of increase, the second round of increase, and the third round of increase, the amplitude of the rise is getting smaller and smaller, which indicates that the bullish strength is slowing down.
The amplitude of the second round breaking the previous high is very small, and the amplitude of the third round breaking the previous high is even smaller. The breakthrough power is very weak, which represents that the bullish strength has weakened.
The trading volume has also formed a divergence state; the price keeps breaking new highs, but the trading volume is shrinking.
This indicates that although the price is breaking new highs, the incoming funds are actually weakening, which is a strong signal for inducing buying.
So it's obvious that there are large funds exiting pepe. The recent rise belongs to the emotional retail investors entering the market, so the price rise is not strong, and the trading volume is also weak.
This is also why the meme series has been so weak recently. Pepe is the barometer of this sector. Since pepe already shows signs of large funds escaping, those smaller coins have even less support for rising.
If you can judge these signs in advance, then you won't blindly chase this sector recently just because you saw pepe breaking historical highs, thus avoiding risks.
In the past, there were different new sectors like eos, fil, axs, luna, ordi, etc., that came out to attract retail investors and trap them. In the future, there will be all kinds of strange sectors and coins.
Only by being able to identify whether these sectors have value and judging whether the market is an opportunity or a risk can one avoid the fate of losing money and increase the chances of making money.
It’s best not to forget to like and follow the author. Let's achieve financial freedom together in this round of bull market, keep it up~