Recently, altcoins have dropped along with Bitcoin and Ethereum, and the drop has been quite deep, similar to previous technical forecasts. Coinciding with the holiday, there are fewer traders, so this adjustment isn't necessarily a bad thing. It can squeeze out the 'water' that inflated the prices from April to early May, allowing sellers and buyers to exchange hands, solidifying the base. If there is indeed a market rally after the holiday, the foundation will be more stable.
Technically, most altcoins have dropped back to the lows after the first wave of rises in early May, which is considered a normal technical correction. However, those that rose too sharply before have dropped harder, with some even breaking short-term support lines (like the 50-day moving average price). If trading volume doesn't pick up later, it might test the lows from when the market started to rally at the end of April.
When playing with altcoins now, be especially careful about two things:
Those altcoins with low trading volume can easily 'flash crash,' causing prices to drop suddenly.
If Bitcoin and Ethereum continue to drop, altcoins will definitely suffer more and drop harder.
Suggestion:
Don't invest too heavily: It's best to keep the proportion of altcoins to your total funds below 30%.
Cut losses when necessary: If a coin breaks a key support level, don't hesitate, set a stop-loss line.
But don't panic too much; June is approaching, and there might be opportunities:
Every year in the second quarter, the crypto circle often feels like there are 'policy news' or 'money is flowing back again.' If the macro environment becomes more accommodative, or new projects are launched, the market may warm up in some areas. Altcoins in popular tracks like DeFi (decentralized finance) and Layer 2 (scaling solutions) might lead the rise.
While the market is quiet, it's a good time to do three things:
Sort through your coins: Identify which ones are worthless 'air coins' and discard them.
Keep a close eye on the actions of big players: Check on-chain data, such as large transfers and contract usage, to see if any good coins are secretly receiving investment.
Pay attention to industry news: Events like the upcoming blockchain conference and which new coins major exchanges will list could stimulate coin prices.
Finally, a reminder: When playing with altcoins, you need to be patient but also act quickly. Wait for them to stabilize before buying, but once you see a clear signal of an upward trend, don't hesitate—buy when you should. This way, you can seize future opportunities.
Follow Brother Yong's footsteps to see a different circle.
Focus for the day: OM SUI SOL FUN BTC
