Stay away from old coins with price divergence that is too high from the annual line.

Principle: In the long run, prices always fluctuate up and down around the annual line. In a bull market, prices trend upwards around the annual line, while in a bear market, they trend downwards.

There is always a cycle of divergence and return, but prices rarely diverge too far; if they do, it leads to a reversal.

Even Bitcoin is affected by mean reversion. (Only new coins are temporarily not constrained by mean reversion.)

From this perspective, you must stay away from old coins with higher price divergences because a price divergence that is too high from the annual line means more severe overextension and larger bubbles.

The next wave is less likely to outperform the market, as other coins are rising while it is still slowly returning to the annual line.

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