In the cryptocurrency market, price rises often occur at low positions, and this is not accidental; it is determined by market mechanisms, capital operations, and human psychology. By referencing the operational logic of stock market speculators, we can see clearly that rises in the cryptocurrency space also need to meet several prerequisites, and low positions are the best starting point to achieve these conditions. This article will analyze why rises in the cryptocurrency space can only occur at low positions from three perspectives: control, ignition, and positive news, revealing the logic behind it.
1. Control: Accumulating chips at low positions is the prerequisite for rising.
In the cryptocurrency space, whether it's project teams, large holders, or so-called 'speculators,' to push the price of a certain cryptocurrency, they must first achieve high levels of control. The core of control lies in the concentration of chips; only by holding a sufficient number of tokens can one take the initiative in subsequent rises.
Why are low positions the best time for control?
Cost advantage: In the cryptocurrency space, low-priced tokens mean lower capital costs. If a token is priced at only $0.01, $10 million can buy 1 billion tokens; but if the price has risen to $1, the same funds can only buy 10 million tokens. At low positions, speculators can accumulate a large number of chips with relatively little capital, thus laying the foundation for control.
Market calmness makes chips easy to collect: At low positions, market attention is low, retail participation is not high, and sell pressure is minimal. At this time, speculators can quietly buy through long-term accumulation or in the secondary market, gradually increasing their holding ratio without causing sharp price fluctuations. In contrast, at high positions, market sentiment is high, sell orders increase, and the difficulty and cost of collecting chips rise significantly.
The power of high control: Cryptocurrency trading is a matching mechanism. If speculators hold 50%-60% or even higher ratios of tokens, they can effectively control the circulating supply. At this point, even if retail investors want to buy at a high price, if the speculator does not sell, the market will struggle to form effective transactions, and the price will naturally be dominated by the speculator. Historically, many tokens that have risen a hundredfold, such as early DOGE or SHIB, often had large holders completing their chip accumulation at low positions.
The logic of controlling at low positions: Without control, one cannot dominate the price trend. If speculators only begin to accumulate at high positions, not only is the cost high, but they are also easily countered by the market. Therefore, low positions are the golden window for accumulating chips and the necessary prerequisite for rising.
2. Ignition: Low-position rises attract market funds.
After control is completed, speculators need to 'ignite' by rapidly raising prices to attract market attention and guide other funds to enter, thereby reducing their own costs of pushing prices up. In the cryptocurrency space, this process is particularly evident because of the strong speculative atmosphere; FOMO (Fear of Missing Out) sentiment is easily ignited.
Advantages of ignition at low positions:
Using a small effort to achieve a large result: Starting from a low position to initiate a rise, the speculator only needs to invest a small amount of funds to quickly push the price up. For instance, through several days of large buy orders or creating a small-scale limit-up effect, the token price may rise from $0.01 to $0.05, attracting retail and large investors to follow suit. At this point, the influx of market funds shares the cost of the subsequent rise by the speculator, creating an effect of 'using force to counteract force.'
Amplification effect of market sentiment: Retail investors in the cryptocurrency space have a natural preference for low-priced coins, believing that 'cheap' tokens have greater upside potential. Low-position rises easily trigger 'doubling' expectations, quickly gathering popularity. In contrast, high-position rises require more capital and are prone to profit-taking pressure, increasing the difficulty of the rise.
Case analysis: Taking SHIB as an example, from 2020 to early 2021, SHIB's price remained low (below $0.0000001), and market attention was extremely low. However, through community efforts and the ignition operation of a few large holders, the price skyrocketed in a short period, attracting a large amount of retail funds and ultimately propelling it to become a phenomenon-level token. This strategy of igniting from a low position is a typical method of rising in the cryptocurrency space.
The essence of ignition: Speculators cannot solely rely on their own funds to push prices to astronomical levels; leveraging market funds is key. Low-position ignition can stir market sentiment with minimal cost, attracting more players to enter.
3. Positive news: Low-position rises combined with news catalysts.
During the rise, positive news is an indispensable catalyst. In the cryptocurrency space, positive news can be the project's technological progress, exchange listings, celebrity endorsements, or collaborations with well-known institutions. These messages often appear simultaneously with price rises, maintaining market heat and attracting more funds to enter.
Why do low-position rises require more positive news?
Enhancing market confidence: At low positions, tokens often lack attention, and the market has insufficient awareness of their value. By releasing positive news (such as 'a major exchange is about to list' or 'strategic cooperation with a public chain'), speculators can quickly enhance the 'story' of the token, attracting speculators to enter.
Greater premium space: The valuation of low-position tokens is usually low, and positive news easily triggers optimistic expectations of future value in the market, thus driving up the premium. For example, if a little-known token announces a partnership with Tesla, its price could double in an instant. In contrast, good news for high-position tokens is often already absorbed by the market, leading to limited premium space.
Historical case: Taking SOL as an example, in 2020, Solana's price lingered between $1 and $2, with low market attention. However, with the DeFi boom and positive news about Solana's high-performance public chain (such as the explosion of ecological projects and institutional investment), the price started from a low position and skyrocketed to $260 in 2021. The combination of low-position rises and positive news created a tremendous wealth effect.
The role of positive news: Positive news is not only a catalyst for rising but also a tool for maintaining market heat. At low positions, positive news can quickly change market expectations and attract funds; at high positions, positive news is often seen as a 'sell signal,' significantly reducing its effect.
4. The psychology and market logic of low-position rises.
From the perspective of human psychology and market logic, low-position rises are more likely to succeed:
Psychological expectations: Low-position tokens give a sense of 'opportunity'; retail investors believe that the buying cost is low and the upside potential is large, making them willing to chase prices. In contrast, high-position tokens feel 'high risk,' leading to a lower willingness to chase.
Cost-effectiveness: Low-position rises require lower capital costs, allowing speculators to achieve large price increases with smaller investments. In contrast, high-position rises not only have high costs but also easily trigger profit-taking sell-offs, leading to rising failures.
Market consensus: When the market generally believes that a certain token is 'undervalued,' it is easier for funds to form a collective force to push the price up. Low-position rises inherently have this 'consensus' foundation.
5. Low-position rises are an inevitable choice in the cryptocurrency space.
Rises in the cryptocurrency space do not occur randomly; they require the combination of three key conditions: control, ignition, and positive news. Low positions are the best starting point to achieve these conditions:
Control requires low-cost chip accumulation, and low positions are the golden period for accumulation.
Ignition requires market sentiment to cooperate, and low-position rises are more likely to trigger FOMO.
Positive news requires premium space, and low-position tokens are more likely to surge due to news.
Whether it's Bitcoin's early rise from a few dollars to tens of thousands or the hundredfold trends of emerging tokens like SHIB and SOL, history has repeatedly proven that low-position rises are the core logic of wealth effects in the cryptocurrency space. For investors, understanding this logic can help identify potential 'dark horse' tokens and avoid the traps of chasing prices at high positions. The rules of the game in the cryptocurrency space have long been established, and low-position rises are simply a tacit choice between speculators and the market.
Click to enter the Van Binance chat room 2 group
Join the chat room for regular raffles of exquisite Binance merchandise!
