Altcoins have now become something everyone avoids; what should we do?
Just this past weekend, altcoins experienced a significant drop again, leading to the liquidation of 142,513 people, with losses amounting to 350 million USD, and most of the losses occurred in altcoins. In this round of market activity, altcoins have completely become the target of 'everyone shouting to hit'.
In fact, the root of the problem still lies in liquidity. Of course, there are some other factors, such as the explosive increase in the number of altcoins, funds being endlessly diverted, and a large issuance of VC tokens, leading to waves of selling in the later stages of the market, with retail investors' confidence long since exhausted.
Currently, the altcoin market has mostly turned to the speculation of meme coins, but the market response has been that almost no one has made money from it; the entire sector is like a gust of wind, with retail investors' funds evaporating. Worse still, people can no longer concentrate funds to drive the market.
However, we still believe that with the end of interest rate cuts and QT, once the monetary easing policy is initiated, the bull market for altcoins will come again. However, this time we cannot compare it to past prices; the speculative opportunities will be concentrated on fewer hot projects. As we have always emphasized, altcoins are not suitable for long-term holding and layout; they are more tools for trading.
In addition to Bitcoin and some large market cap leading projects, here are some ideas for selecting altcoins:
Market cap should be small: preferably below 100 million USD, or even less than 10 million USD. If it is an early-stage project without significant institutional investment, that would be even better. A small market cap has the advantage that when the market is favorable, the price increase may be larger, potentially leading to tenfold or more gains.
The team is continuously working: for example, the team or officials are consistently promoting project development, official media updates are ongoing, and the code is continuously optimized. These are potential signs of ecological explosion, indicating that the project has long-term development plans.
There should be a concept: some projects may not currently attract much attention, but who knows when the opportunity will arise, and once the concept explodes, it may welcome a wave of price increases. Therefore, it is best to select some projects with certain innovation or potential.
It is best to still be in the primary market: meaning it has not been listed on major exchanges yet. Such projects will have more room for price increases in the early stages because opportunities for early involvement are often the most favorable.
Do not go heavy on positions: this point is very important! Even for good low market cap projects, do not go heavy on positions at the beginning; risk control is always the most important. You can diversify positions and gradually increase holdings to avoid investing all funds at once.