At 3 AM, a screenshot in the community pierced everyone's heart like a sharp blade. Someone invested 500,000 last year, but now only has 80,000 left, nearly halved. Meanwhile, in the neighboring group, the PEPE coin is performing a hundredfold miracle, stirring people's desires. However, we must recognize that the current altcoin market is no longer what it used to be. I have repeatedly warned friends around me that if they continue to use the strategies from 2021, they are undoubtedly digging their own graves.
Why has the era of easy profits disappeared?
The number of projects has exploded.
Now, more than 500 new altcoin projects emerge each month, which is five times the number in 2021. It’s like a once-quiet vegetable market suddenly flooded with 100 stalls selling cabbage. No matter how many cabbages are available, the market is just so big. With oversupply, we can only watch the cabbages rot on the ground, and the altcoin market is the same; the abundance of projects makes it naturally difficult to earn money.
Severe shortage of capital supply.
Currently, the total market value of the entire cryptocurrency market is 2.5 trillion, but there are as many as 30,000 projects that need to be 'fed.' This situation is like trying to divide three bowls of rice among 300 people, with the vast majority getting nothing but watery rice. There’s only so much capital, yet the number of projects is overwhelming, and most altcoins simply do not receive enough funding to survive and rise.
The strategies of market makers are constantly upgrading.
I once tracked a trader and found that their strategies have become very shrewd. They only choose about three coins to focus on, while other altcoins are merely smoke screens they throw out. These smoke screens create a sense of anxiety that “missing out will make you rich,” compelling retail investors to jump in, and when they do, the traders take advantage of the situation to profit and exit.
Three golden rules for uncovering potential altcoins.
In-depth analysis of on-chain data.
Utilizing professional tools like Nansen to closely monitor changes in holdings. For example, before SOL surged, the number of addresses holding over 100,000 coins suddenly increased by 37%. This is clearly a signal of market makers entering the market, like dark clouds gathering in the sky before a storm, indicating that significant actions are about to take place.
Accurately find genuine ecological projects.
To measure whether a project has potential, two key indicators should be examined. One is the actual number of users; only with more users can a project have the motivation for sustainable development. The second is developer activity, which can be assessed by looking at the number of code submissions on GitHub. There was a DeFi project that, although its price showed little fluctuation at the time, had a steady increase in code submissions for six consecutive months, indicating that developers were continuously improving the project. Such a project exploding is just a matter of time.
Focus on 'reborn from the ashes' coins.
Pay close attention to those altcoins that have dropped more than 80% and have been flat for over half a year. They are like springs compressed to their limits; once the market environment improves, the rebound will be astonishing.
In the altcoin market, the key to making money is not how many choices you can make, but whether you can restrain yourself. Be sure to set a stop-loss point in advance and strictly follow the plan. As long as you can survive in this brutal market until the next bull market, you will have already outperformed 90% of people.
