Currently, the market sentiment in the crypto industry is extremely disappointed with the altcoin sector. Compared with Bitcoin, altcoins have not performed as expected in this bull market. Although the market generally expects altcoins to rise with Bitcoin, the actual situation is not the case.
Why can altcoins still fall by more than 90% in the context of a bull market? There are four reasons:
Money shortage era
Without financial support, it is just empty talk. Funds are the blood of the market. Without financial support, it is difficult for any currency to rise.
There is less and less money, but more and more currencies
Looking back at the bull market in 2017, there were less than 3,000 coins on the market. Scarcity led to concentrated funds and easy takeoff. By 2021, the number of coins has skyrocketed, but funds are relatively abundant, and hot narratives can still rotate. By 2024, there are more than 30 million coins on the market. The market is completely out of control, and dozens of new coins are added every day.
Narrative conclusion
This bull market has basically seen no second hot topic; the past hype around inscriptions and AI has not seen similar highlights this year. Without new stories to attract funds, the market will naturally become sluggish.
Retail investors disappear
No one is taking the offer, and the market makers are also too lazy to play. Altcoins essentially rely on retail investors continuously entering the market to drive prices up, but note that in this bull market, institutions are only focusing on Bitcoin, and retail investors have hardly entered. Retail investors in the U.S. can directly invest through BTC ETFs, which is more convenient than altcoins, making it unnecessary to consider these currencies.
So, in the current situation, how should we act to achieve profitability?
Currently, the market is in the process of transitioning from monetary tightening to easing; however, a complete easing state has not yet been achieved, as current interest rates remain high, and the second wave of ETH has not fully arrived. Based on this, for investment in secondary altcoins, do not have overly high expectations for long-term holding strategies; it might be better to take a swing trading approach, exiting promptly after making a profit. Of course, if there is a strong expectation for a significant rise in ETH's second wave, then a substantial rise in secondary altcoins is worth looking forward to.
In the coming time, Bitcoin may show a trend of fluctuating upwards or downwards, which will become the new market norm, while the altcoin market will frequently experience alternating bull and bear markets during this process.
From various signs, ETH has a high probability of starting a second wave of market movement. Therefore, I believe there are investment opportunities in secondary altcoins, but this does not mean that all currencies can achieve 5 to 10 times or even higher increases. Thus, fundamentally, we still need to choose the currencies that perform relatively strongly in this round of market.
The market is like a great wave washing away sand; those projects that lack innovation and practical use, purely for the purpose of exploiting investors, will gradually be eliminated by the market. Investors who are stuck at high positions may never see the day they can break even.
As the saying goes, the nutrients from withered leaves nurture new buds. Those projects that truly possess innovation and have practical value for people and industry development will undoubtedly receive enthusiastic support from the market.
Trading strategy is crucial
In a bull market, my recommended strategy is to hold firm and not sell, only optimizing positions and trading exchange rates. By holding Bitcoin, one can leverage its price fluctuations along with the altcoin market to quickly gain insight into market trends and seize opportunities.
When holding spot positions, the strategy focuses on buying lows and making good use of the exchange rates between currencies, avoiding contracts, especially shorting.
If you have 100,000 cash in hand after selling at a high position, now is the perfect time to buy low, which is very different from your position when holding. Trading strategies vary from person to person; a profitable strategy is a good strategy. Experts can accurately escape peaks and buy lows.
If this cannot be achieved, patiently hold Bitcoin, waiting for market fluctuations; patience is the key to victory.
