The cryptocurrency market has been quite interesting recently—Bitcoin and Ethereum, the two 'big brothers', are slowly climbing up, while a bunch of altcoins are skyrocketing like they're on a rocket. It feels like the top student in class scored 90 but is still working hard, while the underperformer suddenly scored 80 and the whole class is cheering. There are actually a few reasons behind this, let me break it down for you.
1. Capital Rotation: The big brother rises, and the little brother follows.
Bitcoin has eaten its fill before the soup is served to others.
A few months ago, Bitcoin soared from $70,000 to over $90,000, like a big magnet sucking all the money from the market. Now that it has reached a high and started to 'take a breather', those trading coins look at it and think: 'Bitcoin is not charging forward for now, why not trade some cheap altcoins with the remaining money!' It's like when the main dish is finished at a banquet, everyone starts grabbing for dessert.
Altcoins have dropped so badly that even their mothers wouldn't recognize them.
Many altcoins have plummeted to the point where nobody recognizes them. For example, SOL dropped from over $200 to over $70, and EOS fell from $20 to less than $1. Now that Bitcoin has stabilized, these 'discounted' altcoins have become targets for bargain hunters, like vegetables on sale at the supermarket after 8 PM.
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2. Risk Warning: Be careful, fireworks can turn into firecrackers.
What rises fast can fall even faster.
Many altcoins in this wave of increase have no actual support. It's like a balloon that gets too big and will eventually pop. For instance, last month a certain AI coin surged 300% in two days, only to be exposed as a copy of someone else's code, resulting in a direct halving of its value.
Market manipulators can take profits at any time.
Many altcoins have low circulation, and market manipulators treat buying and selling like a game. Recently, one coin surged 80% in a day, and the next day, the project team's wallet transferred out $20 million, clearly preparing to run away.
What should ordinary people do?
Don't go All in: Just play with some spare money; don't mortgage your house or car.
Take profits: If you've made 20%-30%, consider withdrawing your principal and leaving the profits to continue floating.
Only buy mainstream coins you've heard of: Coins like SOL and AVAX at least have some actual users; don’t even touch the air coins.
Keep an eye on Bitcoin: If it suddenly skyrockets or plummets, buckle up quickly.
In short, this wave of altcoin frenzy is more like a game of 'Don't run, fellow villager'. It's really lively, but you need to remember: The ones who make money in a casino are always the ones running the casino, not the gamblers.