Cryptocurrency Survival Guide: 8 Rules to Help You Avoid the Trap of Altcoins
When I first entered the crypto space, I too lost sleep over altcoins. After 5 years of pitfalls, I've summarized these hard-learned lessons. The following anti-zero strategies helped me avoid 90% of the traps.
1. Market Cap Caution Line Rule
A market cap of 50 million is the lifeline (refer to CoinMarketCap data).
Case Study: Last year, a certain 'metaverse' coin's market cap dropped below the caution line and went to zero within 3 weeks.
Alternative: Prioritize assets within the top 50 by market cap and with good liquidity.
2. White Paper Identification Three Essentials
Is the technical roadmap clear (including quarterly milestones)?
Is the token economic model reasonable (inflation rate/unlocking period)?
Is the competitive analysis professional (must include specific data comparisons)?
Beware: White papers that are full of jargon but lack substantive content.
3. Community Scam Prevention Guide
Identify characteristics of promoters: newly registered accounts/copy-pasted scripts.
Important Indicators: Check the real interaction rate of the community (not artificially inflated).
Advice: Only refer to third-party community discussions (like Reddit).
4. Team Evaluation Matrix
Core members must be verifiable (LinkedIn + GitHub).
Development progress must be transparent (weekly code submission records).
Danger Signals: Teams that over-market but have no product demonstration.
5. Security Audit Must-Check Items
At least pass audits from 2 well-known auditing firms (like Certik).
Audit reports must include key risk warnings.
Note: The probability of hacks for unaudited projects is over 60% (2023 data).
6. Exchange Survival Rules
Only trade coins on the Top 10 exchanges.
Common tactics of smaller exchanges: artificially create spikes/restrict withdrawals.
Liquidity Test: If the buy-sell spread exceeds 3%, it’s dangerous.
7. Stop-Loss System Establishment
Set a hard stop-loss line (recommended 15%-20%).
Abnormal volume and price judgment: If there's a divergence for 3 consecutive days, exit the position.
Tool Recommendation: Use TradingView to set alerts.
8. Position Management Secrets
No single coin should exceed 5% of total positions.
Keep total altcoin positions within 20%.
Profit protection: After recouping capital, only use profits for speculation.
Practical Insights:
I filtered out 97% of altcoins using this method; although I missed some coins that skyrocketed, I successfully avoided 38 projects that went to zero.
Remember: Surviving longer in the crypto space is more important than making quick profits. I suggest newcomers practice with a demo account for 3 months before trading with real money.
The crypto space has never been a battlefield of technology but a battleground of execution. Follow the master! In the next bull market, I’ll help you tear open the cracks of wealth!
