"The Complete Guide to Cryptocurrency Investment", only after learning it can you be considered to have taken the initial step into the ranks of investors. 😁
Table of contents:
1. Cyclicality of the cryptocurrency market and the “three-wave” structure of the bull market (having a big picture view to avoid chasing ups and downs)
2. Construction of investment model for beginners (capital size, investment cycle length and available investment time) and risk control awareness (four questions about investment)
1. Cyclicality of the cryptocurrency market and the “three-wave” structure of the bull market (having a big picture view to avoid chasing ups and downs)
Cyclical nature of the cryptocurrency market: (Historical trends are for reference only and do not represent the same trend in the future)
① Big cycle: once every four years, Bitcoin deflation and production reduction occur every four years, which reduces supply and drives up prices.
② Small cycle: once a year to a year and a half, a small bull-bear speculation and capital heat rotation cycle (rotation every 12-18 months or so)
Current cycle position (in the early rising stage of the bull market? Or in the falling stage of the bear market?)
At this stage, we are in the mid-to-late rising stage of the bull market in the third small cycle of the Bitcoin halving cycle from 2020 to 2024. The further we go, the more we need to pay attention to risks.
2. The bull market "three waves" structure
① The first wave: Bitcoin (BTC) market index is similar to the stock index and Ethereum (ETH) technical index is used as the market index level index. It first rises and sucks blood as a symbol of the start of the bull market.
Before each rise, Bitcoin will first suck blood, and the market value of Bitcoin accounts for more than 51%
② The second wave: The leading currencies in the mainstream track (Layer2’s leading currencies Arb, OP, etc., RWA, modular blockchain (extended-range electric vehicles), DeFi, GameFI, decentralized derivatives) began to rise in tandem, and after Bitcoin maintained a high level and stabilized sideways, it began to develop its own market (either issuing coins, or mainnet, or updating progress)
③The third wave: The profit funds from the speculation of altcoins overflow (meme coins, local dogs, ancient star projects and some currencies that have not risen in value on mainstream exchanges). At this time, there is chaos. The funds that overflowed from the first two waves began to flow into currencies that have not risen in value and new currencies. It is also the time when projects that can increase by hundreds or thousands of times emerge, and Fomo sentiment breaks out in full swing.
So far, a round of bull market has been completed. If Bitcoin continues to break new highs, it will continue the "three-wave" cycle.
At this stage, it is at the tail end of the third wave and is about to fall back and wait for Bitcoin to make the next round of decision (start the next bull market OR callback)
3. Construction of investment model for beginners (capital size, investment cycle length and available investment time) and risk control awareness (four questions about investment)
Investment model/strategy that suits you:
① Capital amount: small/medium/large (if the amount of capital is small, then accumulate the first pot of gold by taking a small risk for a big gain; if the amount of capital is large, then invest in periodic investment and arbitrage)
② Investment cycle length: short/medium/long (short for news and hot topics, long for cyclical investment and ambush potential projects)
③ Available time for investment: less/more (less means selective investment, more means deep and wide investment to catch hot spots)
Risk control awareness (four questions about investment): Learn to stop profit and stop loss
Here are some questions to think about every time you invest:
① Is the principal safe? Is it possible to return to zero?
② Profit and loss ratio, is it worth it to bear a 20% loss risk to get a 50% return?
③ Time cycle, is it a bull market or a bear market? How long do I need to wait? Will I lose more opportunities and profit margins due to time?
④ Investment return expectations and risk control, for example, if you plan to make a 20% profit, be prepared for the stop-loss risk of a 10% loss.
At this point, I have gradually moved from a novice to a normal investor, rather than a pure leek. I have a lot of things in my mind, but I need your inspiration and shameless advice. I will try to share as much of my experience and lessons learned from my personal investment path as possible to help you avoid some pitfalls.
Give a path preview (search by keywords):
When you first start to get involved in a track/project, you can learn about project information on information collection platforms such as Rootdata.com, and consult on consulting platforms such as Golden Finance to learn about project dynamics. You can also use advanced search on Twitter to obtain bloggers’ investment research and opinions, etc. Finally, you can combine the macro and market trends to judge the trend of the project through news (try to only participate in high-probability events and high profit-loss ratio events at the beginning, and then keep checking for omissions). The road is long and difficult, so you should position yourself and do what you can. (Distinguish between main tasks and side tasks)
