Hello everyone, I am Jiu Jiu, an old retail investor. Follow me to understand the tactics of old retail investors.
On December 20, the entire cryptocurrency market experienced a shocking crash, with most cryptocurrencies experiencing declines of up to 30% to 50%.
But you know, for seasoned retail investors who are prepared, this is a thrilling opportunity to scoop up.
As for how to prepare positions during the rise, we will talk about it later. I just want to discuss one topic in this article: how to find the cryptocurrency with the highest rebound potential in advance?
First talk about achievements, then talk about methods:
On December 19, when the decline first appeared, I mentioned three varieties in the senior group.
This shows the rebound situation of all cryptocurrencies during the rebound on December 21. The larger the bubble in the figure, the greater the increase, and there are two prominent ones on the list.
Of course, there are many varieties that turned green during today's rebound, but most are around 10%, and those that reach 20% are not many.
How can we layout in advance? I think we should mainly consider the following directions.
Popular track
To judge whether it is a potential rebound powerhouse, the first principle is: has it been frequently talked about recently?
A lively project, when it hasn’t overheated yet, experiencing a slight decline will only bring more intense attention, while a quiet project won't even be remembered.
As the saying goes, 'Cold in the bustling city, unknown; hot in the deep mountains, someone asks.'
Strong market
The market is the language of the main force, but unfortunately, not many can understand it.
I provide a non-technical method here for assessing the strength of the current market.
This method is very simple, called 'the strong continue to be strong.' Looking back at the three varieties mentioned above, what characteristics do they have? The answer is: before the decline, they all reached consecutive new highs, but when they fell, they didn't drop much. It's that simple and straightforward.
In fact, consecutive new highs are not simple; this usually involves the main force continuously pushing up with news support. At this time, you might ask, what if the main force sells off when the market declines?
This kind of question is only asked by retail investors; in fact, the main force never sells off during a decline.
You might have a new question: will the main force stop the current rise temporarily?
So you see, I have an additional condition above—didn't drop much, which indicates that the main force is taking over. This posture is not something retail investors can achieve.
Project expectations
When assessing whether a project is worth investing in, we first need to understand what this project will become in the future. It is important to note that this is not about how it is doing now, but rather the future expectations. We can usually obtain this information from the project's white paper, roadmap, interviews with the project team, AMAs, etc.
It doesn’t mean that the project team must achieve a certain outcome, but rather it gives us a vision of what it could be. This vision should have enough imaginative space, just like you boast to the boss in an interview; it doesn’t have to be realized, but it should demonstrate your capability. This expected vision is what retail investors are willing to invest real money in.
Solve problems
Generally speaking, whether a project can gain widespread application or mention in a short time mainly depends on whether it happens to solve the current problems. Just like in the last bull market, when everyone criticized ETH for its high fees and slow speed, Solana happened to solve these issues and rose rapidly.
What are the issues in this bull market? For example, the proliferation of VC tokens, numerous problems arising from leading exchanges, severe on-chain security issues, etc. What we need to find are projects that provide solutions to these problems. As the issues evolve, these project teams will gain more attention, resulting in positive feedback.
Long-lasting narrative
For any project, even a dog project, we need to consider whether its narrative is a long-lasting one.
Many project narratives are inherently unsustainable, and some dog projects sound absurd. These narrative projects can be played, but cannot be played long-term; they will eventually fall into a ditch.
Projects with real rebound strength have narratives that can withstand scrutiny, especially in this cycle, their narratives might be one of the mainstream narratives, which requires us to frequently observe market trends to know.