Mainstream Coins vs Altcoins: Differences in Chip Structure, Liquidity, and Trading Methods

Cryptocurrencies are generally divided into mainstream coins (such as BTC, ETH, and other top market cap currencies) and altcoins (other currencies with small to medium market capitalization) based on market value and market position.

There are significant differences between the two in terms of chip distribution, market depth, volatility characteristics, and the level of participation by major players, which directly affect trading strategies. The following will compare the differences between mainstream coins and altcoins from multiple dimensions:

From the table above, it can be seen that mainstream coins have dispersed chips, strong liquidity, and their trends depend more on the overall capital situation and fundamentals; a single player finds it difficult to manipulate prices at will. In contrast, altcoins have concentrated chips and weak liquidity, with major players able to create severe volatility through market control. For day traders, these differences imply that strategies need to be adjusted:

Risk Control: Trading altcoins requires more caution in setting stop-losses and controlling position sizes. This is because major players in altcoins may suddenly break conventional technical patterns, leading to 'waterfall' or 'rocket' market movements. Risk control cannot rely solely on technical indicators; it is essential to consider the possible trading intentions of major players. Mainstream coins are relatively stable, allowing for an appropriate increase in position size for trend trading, but one must also be aware of the amplified effects of volatility under contract leverage.

Timing Strategy: When dealing with mainstream coins, macro news and large on-chain capital movements are important references (as the dispersed market is more sensitive to these); for altcoins, the movements of project parties, community sentiment, and the trading behavior of major players are more critical. For example, if an altcoin sees abnormal trading volume increase without any significant news, it is often a sign of major players controlling the market, and one might consider a contrarian strategy or wait-and-see approach.

Trading Tactics: Mainstream coins have good liquidity, making it easy to execute limit orders with low slippage, and high-frequency trading in and out is relatively feasible; for altcoins, it is recommended to use limit orders as much as possible to avoid large slippage losses from market orders. Observing large limit orders on the order book is very important; if one finds significant buy orders supporting a certain altcoin, it may indicate major players are accumulating, and one could consider buying just above that level to bet on a rebound; conversely, if there is a huge sell wall repeatedly appearing above, be cautious of major players offloading and avoid chasing highs.