Original source: CryptoAmsterdam X account
Author: CryptoAmsterdam
Translated by: Shenchao TechFlow
1. When does altcoin season arrive?
I believe the altcoin season will arrive soon; here are some key analysis points:
1.1 The cycle is divided into two stages
Stage 1: Bitcoin price rises while altcoin prices fall (Bitcoin dominance increases).
Stage 2: Bitcoin breaks through historical highs, and altcoins begin to enter a rapid rise.
The following diagram shows this pattern more clearly:
At this stage, we started accumulating altcoins when the total market cap of altcoins was at a low point. I believe that altcoin prices will break new highs just like Bitcoin.
Currently, stage 2 has been initiated!
For more details, see: link.
1.2 Capital flow patterns
The starting point of the bull market can be traced back to the end of 2023, when Bitcoin bottomed out, returned to the range, and rose to previous highs, while altcoins depreciated against Bitcoin, and Bitcoin dominance increased.
When Bitcoin breaks through historical highs (i.e., the current stage), funds start to flow into large-cap altcoins. From the Total 3 (the total market cap of the top 100 altcoins minus BTC and ETH) chart, although currently driven mainly by large-cap coins (like XRP), the performance of mid- and small-cap coins is also catching up.
Eventually, funds from Bitcoin and large-cap coins will gradually flow into mid- and small-cap altcoins.
As market sentiment rises, investors will become greedier and begin chasing mid- and small-cap altcoins. I expect that mid-cap altcoins among 'Others' will reach new highs. The real altcoin season is still ahead.
1.3 Bitcoin Dominance
Every cycle has a similar pattern: when Bitcoin's price breaks through previous highs and first peaks, its market share begins to decline.
Currently, Bitcoin's market share has broken a rising trend that lasted over 800 days.
1.4 ETHBTC trend analysis
In every cycle, Ethereum tends to perform weakly in the early stages (Bitcoin rises but remains below previous highs), then rebounds when Bitcoin stabilizes above previous highs.
The current cycle is no exception. More funds are expected to flow into Ethereum ecosystem tokens, on-chain utility tokens, and high-risk tokens. Once ETHBTC genuinely enters an upward trend, the performance of these tokens will be even more impressive.
ETHBTC chart analysis
Currently, ETHBTC has retraced and is back above the lower range.
In 2021, it failed to break the resistance at stage 4. Can we see a 'super surge' in stage 5 in this cycle?
Breaking through the current downtrend line will end a bear market trend lasting 1100 days.
Additionally, 2024 is also an important year for the launch of Ethereum ETFs (exchange-traded funds), and I believe the market still underestimates Ethereum's potential.
2. Have you missed the opportunity?
As mentioned earlier, the Amsterdam team has been accumulating altcoins during the Total 3 market cap lows over the past 5-6 months.
At the lower range, it is recommended:
Buy at key support levels;
Gradually build your position during slow consolidation, rather than chasing prices;
Set clear stop-loss points (such as below the range);
The market is less volatile, making it easier to hold positions.
But if you choose to buy after the price rises vertically:
You may not have a clear stop-loss point. This may not matter much for short-term traders, but for long-term investors, lacking a stop-loss increases risk.
The opportunity for profit from the low to high range has disappeared; the current bet is whether the 'altcoin market cap can break new highs.'
Buying during a rapid price increase phase will expose you to higher market volatility, with 20-30% pullbacks not being uncommon.
So, I believe it is not too late for you, because:
Bitcoin still has room to rise.
Capital rotation has not yet fully reached the mid- and small-cap altcoin stage ('Others' chart indicates potential for new highs), so the most profitable phase has not yet arrived.
Bitcoin's dominance may further decline, while the ETHBTC ratio will rise.
But please pay attention to the following points:
Understand the stage of the current market cycle.
Clarify whether you are entering a coin for short-term trading or long-term investing.
Formulate a clear profit plan.
Recognize that this is a high-volatility phase, where rapid declines of 10%-30% may occur.
Accept that these rapid declines are difficult to predict; if you try to trade these pullbacks, you may undermine your originally longer-term investment plan.
Analysis of the 'risk' of entering at this stage (rather than in the past 3-6 months):
Please refer to this.
3. Recommendations on how to enter:
If you missed the accumulation period in the past 6 months, first think about why you missed it.
It is likely because you are influenced by emotions:
In a bull market, price increases are usually very rapid, with almost no significant and sustainable pullbacks.
Many people missed the opportunity to rise, and when they 'fear missing out' and chase prices, the market often enters a consolidation or rapid decline phase.
During the consolidation, they become pessimistic again, ultimately missing out on another opportunity for rapid growth.
The correct strategy is: build positions in batches during consolidation or pullback phases, and remain patient, focusing on the market structure over longer time frames.
For more content, please refer here.
Next are specific recommendations!
Suggestion 1: Stick to spot trading, avoid leverage
Prioritize spot trading.
Many people are accustomed to using leverage, but it is actually a trap. Every market fluctuation feels like an 'opportunity', but most of the time it is not. You don’t need to rush into action. Leveraged trading will ultimately lead most people to losses or even wipe them out—don’t let it ruin your bull market gains.
Stick to spot trading, so you won't be unable to hold your positions due to excessive leverage, or worse, get liquidated and miss market opportunities.
Trust me, stay away from leveraged trading.
Suggestion 2: Don't chase the price, focus on pullbacks
Most people trade based on emotions, buying only when prices rise (green candles), because it makes them feel 'safe'.
However, the market will not rise straight up; even in a bull market, there will be pullbacks:
Daily fluctuations: small pullbacks of a few percentage points.
Every few weeks: panic sell-offs of 10%-30%.
If you buy when the price rises, you are likely to sell in panic during a pullback.
Buying during an increase may feel reassuring.
Selling during a downturn may feel liberating.
But the correct strategy is:
Buying may make you feel scared, but it is the right time.
Selling may make you feel reluctant, but it is a rational choice.
If you can operate against the trend, building positions during pullbacks and buying boldly during panic sell-offs, you will have an advantage over most people.
Suggestion 3: Build positions in batches, operate patiently
So far:
Only choose spot trading.
Don’t chase the price, but build your position during pullbacks.
Moreover, you don’t need to invest all your funds at once.
You can choose to gradually build your position. If the price drops by 5% and you invest all your funds into altcoins at once, if the market experiences a larger adjustment (like a drop of 10%, 20%, or even 30%), you may panic and sell.
The correct strategy is: invest 10% of your funds when the price drops by 5%. This way, when a larger pullback occurs later (such as 10%, 20%, or 30%), you can continue to gradually increase your positions instead of being shaken out by market fluctuations.
What if the pullback does not deepen further? That’s okay. Don’t invest all your funds at once out of fear of missing out; this could force you out during a deeper pullback.
There will be more pullbacks and opportunities to build positions in the future.
In a highly volatile market, you cannot perfectly predict every fluctuation. You don’t need to buy at the lowest point or sell at the highest point; just focus on long-term gains.
Suggestion 4: Control risks, avoid overexposure
You may have heard those legendary stories of 'going all in' and making millions, but taking excessive risks greatly tests your psychological endurance. If your position is too heavy, you may be forced to sell out of panic during a market pullback, ultimately missing out on bigger opportunities.
Suggestion 5: Develop a plan that suits you
Do not directly apply others' plans; instead, develop a clear investment plan based on your own goals and risk tolerance. This plan should include risk management and various contingency plans in case market movements do not align with expectations.
A good plan can help you remain calm during market fluctuations, avoiding making wrong decisions due to panic or euphoria, while also assisting you in gradually achieving profit exits.
Here are the key points that need to be clarified in the plan:
Keep it simple: do not overcomplicate the plan.
Focus on long-time frames (HTF): pay attention to the big trends, not short-term fluctuations.
Clarify your goals:
What market signals do I want to see?
Which tokens do I want to invest in? Why choose them?
How much capital do I plan to invest?
At what price ranges will I build positions in batches?
When do I exit?
Regarding how to formulate a periodic profit plan, you can refer to this tweet.
Suggestion 6: Focus on long-time frames, keep the strategy simple
Focus only on long-time frame (HTF) charts and avoid being disturbed by short-term fluctuations.
You only need to focus on the key price ranges and market structure, without getting too caught up in market noise.
Keep the strategy simple and clear.
Even simple strategies can give you an edge in the market:
Most people use leveraged trading, but you don’t.
Most people chase prices when they rise (green candles), but you don’t chase.
Most people don’t have a clear profit plan, but you have your own plan.
Most people buy or sell all at once, but you choose to build positions and exit gradually.
Before sharing my list of altcoin observations, let’s discuss an important point:
Opinion:
In the current market, altcoins ('Others' market cap) are expected to reach new highs, attracting capital inflow from Bitcoin and mainstream coins.
Currently, the 'Others' market cap is slightly above the median of the range and is gradually approaching the upper range.
It is important to note that the upper range is usually a strong resistance area, and there may be multiple tests and pullbacks before breaking through. When the market performs strongly (like today with a sea of 'green'), this is often overlooked.
Recall how Bitcoin performed before breaking through the upper range: it experienced multiple pullbacks and consolidations before successfully breaking out.
Even looking back at the last bull market cycle, at the beginning of the altcoin season, the 'Others' market cap chart experienced a significant pullback of 30% before breaking through the upper range.
So please remember the following points:
Before the full altcoin season arrives, the market may experience significant pullbacks, possibly lasting several weeks.
But don’t try to predict these pullbacks and wait; instead, adopt the following strategies:
Gradually build your position: increase your position incrementally, don't invest all your funds at once.
Avoid using leverage: leveraged trading is extremely risky and may lead to forced liquidation.
Buy during pullbacks: focus on building positions when the market is down (red candles), rather than chasing prices when they rise (green candles).
Stay patient and follow a long-term strategy; you will be more likely to profit from market fluctuations.
$SOL
SOL is currently a strong-performing large-cap coin, showing clear advantages in this market cycle—this is a choice worth noting.
From the perspective of the market cycle, I expect SOL to break through the current upper range and have significant upside potential when the price enters the 'discovery phase' (i.e., after reaching a historical high, the market explores its true value).
It is currently worth considering building your position in batches at this stage, but be aware that the current price is at a resistance area near the upper range. If you buy all at once, you might struggle to withstand a potential future price pullback of 10%-30%. Therefore, it is recommended to strictly follow the plan of building positions in batches.
Additionally, it is recommended to use spot trading and avoid leveraged operations. Here are my operational thoughts:
Wait for the price to break above the upper range before making a small initial investment.
If the price continues to rise and stabilizes at a high level, you can continue to add to your position in batches.
If the price drops below the range and then breaks out again, that is another opportunity to add to your position.
If the price retraces back to the previous consolidation range, it can also be a time to build positions in batches.
Consider adding to your position when the price rises again after a pullback and breaks a short-term downtrend line.
In summary, formulate a clear response plan for various potential market movements and gradually build positions through spot trading.
2. $BLUR
BLUR is a relatively special coin. Earlier this year, it failed to hold the lower range of stage 4 (i.e., the price support in the lower area failed), which may have been due to the overall slump in the NFT market at that time.
Today, the NFT market is recovering. Opensea may launch its own token, and the Magic Eden token will also go live next week.
With the push from these positive events and the current market and chart performance, BLUR may regain market attention.
My main observation point is: when the price reclaims the lower range (as indicated by the arrows on the chart), will there be an opportunity to build positions?
If the market drops again, you can also try to build your position at the lower end of stage 3.
However, for me, this coin is more suitable for short-term trading rather than long-term holding.
3. $MEME
The investment cycle around meme themes is known even to ordinary investors. I find it hard to imagine that a token named 'MEME' could go live on all top exchanges without attracting widespread market attention.
The price structure of this token is very perfect, currently in stage 3. I will wait for the price to clearly break through and reclaim key positions before entering.
Additionally, this token is associated with a large NFT series. With the recovery of the NFT market, the implementation of the $ME incentive program, and the potential launch of the Opensea token, it may gain further upward momentum.
4. $ORAI
$ORAI is a veteran AI token. Last week, it successfully reclaimed stage 4 (orange area) in a short-term market structure, so I bought some positions again.
If the price retraces back to this range, I will continue to add to my position.
Additionally, I have set price alerts; when it forms a breakout above the macro range low, it will become a new entry signal.
5. $TIA
Since TIA reclaimed and retested the lower range, I have held it.
Currently, it is attempting to break through the current price structure. I believe that if the price forms a clear breakout above the gray area, then the subsequent pullback will be a great opportunity to add to your position.
