Several ways to make money in a major trend in the cryptocurrency market:
1. Beta strategy: In the early stages of a trend, use a large position or even a full position in major cryptocurrencies like Bitcoin, Solana, Ethereum, BNB, etc. When you see the trend rising, do not hesitate, because full positions are in major coins, and the risk of holding large-cap cryptocurrencies for beta targets is not significant. It tests your decisiveness (whether you dare to take large positions when you see the trend rising).
2. Alpha strategy: Choose potential strong sectors' leading coins or secondary leaders based on fundamentals, major events, and cyclical narratives. This considers vision and patience: vision determines whether the selected sectors are strong, and patience determines whether one can withstand fluctuations and hold steady. All strong targets seem obvious in hindsight, but the actual process is fraught with ups and downs, making it easy to be shaken out. The risk is misjudging the market, leading to significant losses when the tide recedes.
3. Super alpha approach: Choose based on the rotation of different sectors. When the trend just starts to rise, hold a large position in Bitcoin and Solana, and then switch to Ethereum, including some stronger small-cap sectors with greater elasticity when the time is right. This requires a higher level of understanding: familiarity with the rotation rules of the cryptocurrency market, sensitivity to short-term strong narratives, and a certain level of technical analysis ability to discern the strength of potential breakout through volume, price, and patterns. Additionally, switching positions must be decisive. The risk is misstepping the market, leading to losses on both sides.
4. This round of greater gains is on-chain, although the win rate is low, the odds are huge; however, one cannot use large positions, only small positions can be used to bet on a large space. Vision, patience, action, and discipline are all indispensable. To be honest, generally, only top players can succeed. The above mainly discusses spot strategies without mentioning contracts or leverage. In my personal view, contracts are amplifiers, and the discipline required for contracts is the highest; they can amplify both gains and losses, so I do not recommend everyone to engage in them. If you make a mistake and do not stop-loss in time, a large price fluctuation may wipe out your position.
Of course, for most, a large capital beta strategy should serve as the ballast, and then allocate part of the funds to pursue alpha and super alpha strategies. Smaller funds can focus on the second and third types of strategies. Essentially, they are all considerations of win rate, odds, slope (time cycle), and position. The challenge in the current cryptocurrency market lies in the strong cyclicality of alpha and super alpha strategies, both of which are enhanced versions of trends. As long as the market trend is there, there is alpha; once the market trend reverses, the withdrawal speed and magnitude of all alpha may be significant. The essence is still driven by liquidity and sentiment; without strong fundamentals, it is difficult to go against the trend.
The final breakthrough in price requires external conditions to trigger it. Continuous capital inflow is the material support for a bull market. After Bitcoin breaks through the $100,000 mark, the Altseason will gradually open up. Once Altseason opens, the market will gradually present: 1. ETH breaking through historical highs; 2. The market rising broadly; 3. The main market trends gradually being identified.
The price level of $100,000 may become a key point for this round of Bitcoin's breakthrough. With the continuous entry of institutions and the steady growth of market demand, Bitcoin's price may attract broader market attention and participation as it approaches this important psychological price level, thus pushing it into a new phase.
However, institutions often exhibit indecisiveness before such critical points, and this wait-and-see attitude may lead to a certain degree of fluctuation and adjustment in the market after a smooth trend, especially in the short term, where price volatility may increase, bringing certain pressure to the market.
Moreover, it is important to clarify that the cost structure and investment purposes of institutions and long-term holders in the Bitcoin market are fundamentally different. Long-term holders often hold Bitcoin with a lower cost basis and a longer-term perspective, aiming for value growth in the future. In contrast, the entry of institutional investors, especially those who announce their positions in Bitcoin at relatively high points, may face higher entry costs and a more complex market environment, including stock prices.
Looking back at the peaks of past bull markets, we can see that many institutions entered the market at high prices, ultimately facing the risk of price corrections. Therefore, in the current market environment, although institutional participation brings new momentum to the Bitcoin market, investors should remain vigilant, carefully assess market risks, and avoid blindly chasing high prices.
