Decoding the copycat season: 6 strategies for winning

Original author: CryptoAmsterdam, crypto analyst

Original translation: TechFlow

1. When will the alt season come?

I think the alt season will come soon. Here are some key analysis points:

1.1 The cycle is divided into two stages

· Stage 1: Bitcoin price rises, altcoin price falls (Bitcoin market share rises).

· Stage 2: Bitcoin breaks through the historical high, and altcoins begin to enter a rapid rise stage.

This pattern can be seen more clearly in the following figure:

In this phase, we started accumulating altcoins when the total market value of altcoins was at the low point of the range. I believe that the price of altcoins will break through new highs like Bitcoin.

Currently, Phase 2 has been launched!

For more details, please see: Link.

1.2 Capital Flow Law

The starting point of the bull market can be traced back to the end of 2023, when Bitcoin bottomed out, returned to the range and rose to the previous high, while altcoins depreciated against Bitcoin and Bitcoin's market share increased.

When Bitcoin broke through its historical high (that is, the current stage), funds began to flow to large-cap altcoins. From the Total 3 (the total market value of the top 100 altcoins minus BTC and ETH) chart, although it is currently mainly driven by large-cap coins (such as XRP), the performance of small and medium-cap coins is also catching up.

Eventually, funds from Bitcoin and large-cap coins will gradually flow into small and medium-cap altcoins.

As market sentiment rises, investors will become more greedy and start chasing small and medium-cap altcoins. I expect "other" medium-cap altcoins to reach new highs. The real altcoin season is still ahead.

1.3 Bitcoin Dominance

Each cycle has a similar pattern: when the price of Bitcoin breaks through the previous high and rises for the first time, its market share will begin to decline.

Currently, Bitcoin's market share has broken an upward trend that has lasted for more than 800 days.

1.4 ETHBTC Trend Analysis

Each cycle, Ethereum will be weak in the early stage (Bitcoin rises but is still below the previous high), and then start to rebound when Bitcoin stands above the previous high.

The current cycle is no exception. More funds are expected to flow into Ethereum ecological tokens, on-chain utility tokens, and high-risk tokens. Once ETHBTC really enters an upward trend, the performance of these tokens will be even more impressive.

ETHBTC Chart Analysis

Currently ETHBTC has retraced and re-entered the range low.

Failed to break through the resistance level of Phase 4 in 2021. Can we usher in the "super rise" of Phase 5 in this cycle?

If the current downward trend line is broken, it will end a 1,100-day bear market trend.

In addition, 2024 is also an important year for the launch of the Ethereum ETF (Exchange Traded Fund), and I think the market still underestimates the potential of Ethereum.

2. Have you missed the opportunity?

As mentioned earlier, the Amsterdam team has accumulated altcoins at the Total 3 market cap lows in the past 5-6 months.

At the low point of the range, it is recommended to:

· Buy at key support levels;

· Gradually build positions in a slow and volatile market, rather than chasing the rise;

· Set a clear stop loss point (such as below the range);

· The market is less volatile and easier to hold.

But if you choose to buy after the price rises vertically:

· You may not have a clear stop loss point. For short-term traders, this may not have much impact, but for long-term investors, not having a stop loss point will increase the risk.

· The profit opportunity from the low to the high of the range has disappeared, and now the bet becomes "Can the market value of altcoins break new highs?"

· Buying in the stage of rapid price increase will face higher market volatility, and 20-30% corrections are not uncommon.

So, I think it's not too late for you, because:

· Bitcoin still has room to rise.

· The capital rotation has not yet fully reached the stage of small and medium-cap altcoins (the "Others" chart shows that it may set new highs), so the most profitable stage has not yet arrived.

· Bitcoin dominance may fall further, and the ETHBTC ratio will rise.

But please note the following:

· Understand what phase of the current market cycle you are in.

· Be clear whether you are entering a currency for short-term trading or long-term investment.

· Have a clear profit plan.

· Understand that this is a period of high volatility and rapid declines of 10%-30% are possible.

· Accept that these rapid declines are difficult to predict and that you may undermine your longer-term investment plans by trying to trade these pullbacks.

For the "risk" analysis of entering the market at this stage (rather than entering the market in the past 3-6 months): please refer to here.

3. Advice on how to enter the market:

If you missed the accumulation period of the past 6 months, you first need to think about why you missed it.

It is likely that you are affected by emotions:

· In a bull market, prices usually rise very quickly with almost no obvious and sustainable pullback.

· Many people miss the opportunity to rise, and when they chase high because of "fear of missing out", the market often enters a stage of shock or rapid decline.

· In the shock, they become pessimistic again, and eventually miss the opportunity for a rapid rise again.

The correct strategy is: build positions in batches during the shock or pullback stage, and remain patient and focus on the market structure of the longer time frame.

For more information, please refer to here.

Next are specific suggestions!

Suggestion 1: Stick to spot trading and avoid leverage

Prefer spot trading.

Many people are used to using leverage, but this is actually a trap. Every market fluctuation makes people feel like an "opportunity", but in fact most of the time it is not. You don't need to rush to operate. Leveraged trading will eventually make most people lose money or even go to zero - don't let it ruin your bull market gains.

Stick to spot trading so that you won't be unable to hold a position due to excessive leverage, or even worse, be forced to close your position and miss market opportunities.

Trust me, stay away from leverage trading.

Advice 2: Don't chase the rise, focus on the pullback

Most people trade based on emotions and only buy when the price rises (green candles) because it makes them feel "safe".

But the market will not rise in a straight line, even in a bull market there will be pullbacks:

· Daily fluctuations: small pullbacks of a few percentage points.

· Every few weeks: panic drops of 10%-30%.

If you buy when the price rises, you will most likely sell in panic when it pulls back.

· You feel relieved when buying on the rise.

· You feel relieved when selling on the fall.

But the right strategy is:

· It may scare you when buying, but it is the right time.

· You may feel reluctant when selling, but it is a rational choice.

If you can go against the trend, open a position on a pullback, and buy boldly on a panic decline, you will have an advantage over most people.

Advice 3: Build positions in batches and be patient

So far:

· Choose spot trading only.

· Don’t chase the rise, but build positions when there is a pullback.

Also, you don’t need to invest all your money at once.

You can choose to build positions gradually. If the price drops by 5%, you put all your money into altcoins at once, then if the market sees a bigger correction (such as a drop of 10%, 20% or even 30%), you may sell out in panic.

The correct strategy is: invest 10% of your funds when the price drops by 5%. In this way, when there is a bigger pullback (such as 10%, 20% or 30%), you can continue to gradually increase your position instead of being thrown out by market fluctuations.

What if the pullback doesn’t deepen further? That’s OK. Don’t invest all your money at once because you’re afraid of missing out, as this may force you out of the market in a deeper pullback.

There will be more pullbacks and opportunities to build positions in the future.

In a highly volatile market, you can’t perfectly grasp every fluctuation. You don’t need to buy at the lowest point or sell at the highest point, just focus on long-term gains.

Suggestion 4: Control risks and avoid excessive risk-taking

You may have heard of those legendary stories of “all-in” making millions, but excessive risk-taking will greatly test your psychological tolerance. If your position is too heavy, you may be forced to sell out of panic when the market pulls back, and ultimately miss out on bigger opportunities.

Tip 5: Develop a plan that works for you

Don’t just copy someone else’s plan. Instead, develop a clear investment plan based on your own goals and risk tolerance. This plan should include risk management and multiple response plans in case the market does not move as expected.

A good plan can keep you calm in market fluctuations, avoid making wrong decisions due to panic or excitement, and help you gradually achieve profitable exits.

Here are some points to clarify in your plan:

· Keep it simple:Don’t make your plan too complicated.

· Focus on long-term frames (HTF):Focus on big trends, not short-term fluctuations.

· Clear goals:

-What market signals do I want to see?

-Which tokens do I want to invest in? Why do I choose them?

-How much money do I plan to invest?

-In which price ranges do I build positions in batches?

-When do I exit?

For how to make a periodic profit plan, you can refer to this tweet.

Suggestion 6: Focus on long-term frames and keep strategies simple

· Only focus on long-term frame (HTF) charts to avoid being disturbed by short-term fluctuations.

· You only need to focus on the key price ranges and market structure, and don't have to pay attention to too much market noise.

· Keep your strategy simple and clear.

Even a simple strategy can give you an edge in the market:

· Most people use leverage to trade, but you don't.

· Most people chase highs when prices rise (green candles), but you don't.

· Most people don't have a clear profit plan, but you have your own plan.

· Most people buy or sell all at once, but you choose to build and exit positions gradually.

Before sharing my altcoin watchlist, let me talk about an important point:

Point of view:

In the current market, altcoins ("Others" market value) are expected to hit new highs and attract capital inflows from Bitcoin and mainstream currencies.

Currently, the "Others" market value is slightly above the midline of the range and is gradually approaching the high of the range.

It should be noted that the high of the range is usually a strong resistance area, and there may be multiple tests and pullbacks before breaking through. This is often easily overlooked when the market is strong (such as today's "green").

Recall Bitcoin's performance before breaking through the high of the range: it experienced multiple pullbacks and shocks before successfully breaking through.

Even looking back at the last bull cycle, at the beginning of the alt season, the “Others” market cap chart saw a sharp 30% correction before breaking through the range high.

So keep the following in mind:

Before the full-blown alt season arrives, the market may experience a large correction, and there may even be weeks of decline.

But don’t try to predict these corrections and wait, instead adopt the following strategy:

· Build positions slowly: gradually increase your position, don’t invest all your funds at once.

· Avoid using leverage: leveraged trading is extremely risky and may result in forced liquidation.

· Buy on pullbacks: Focus on building positions when the market falls (red candles) rather than chasing prices when they rise (green candles).

Be patient and follow a long-term strategy, and you will be more likely to profit from market fluctuations.

1.$SOL

SOL is a strong large-cap coin at the moment, showing clear advantages in this round of market cycle - this is a choice worth paying attention to.

From a market cycle perspective, I expect SOL to break through the current range high and have significant upside potential when the price enters the "discovery phase" (that is, after the price reaches a historical high, the market explores its true value).

At present, you can consider building positions in batches at this stage, but it should be noted that the current price is in the resistance area of the high range. If you buy all at once, you may not be able to withstand the 10%-30% price pullback that may occur in the future. Therefore, it is recommended to strictly follow the plan of building positions in batches.

In addition, it is recommended to use spot trading to avoid leverage operations. The following is my operating idea:

· Wait for the price to break through the high of the range and then build a small position first.

· If the price continues to rise and stabilizes at a high level, you can continue to add positions in batches.

· If the price falls back to the bottom of the range and breaks through again, this is another opportunity to add positions.

· If the price pulls back to the previous shock range, it can also be used as an opportunity to build positions in batches.

· When the price rises again after a pullback and breaks the short-term downward trend line, you can also consider adding positions.

In short, make a clear response plan for various possible market trends and gradually build positions through spot trading.

2. $BLUR

BLUR is a relatively special currency. Earlier this year, it failed to hold the low of the range in stage 4 (i.e., the price failed to support in the low area), which may be due to the overall sluggishness of the NFT market at that time.

Now, the NFT market is recovering. Opensea may launch its own token, and Magic Eden's token will also be launched next week.

Driven by these positive events, combined with the current market and chart performance, BLUR may regain market attention.

My main observation point is: when the price regains the low of the range (marked by the arrow on the chart), will there be an opportunity to build a position?

If the market falls again, you can also try to open a position at the low of the range in phase 3.

However, for me, this coin is more suitable for short-term trading rather than long-term holding.

3. $MEME

The investment cycle of the Meme theme is well known even to ordinary investors. It is hard for me to imagine that a token called "MEME" will not attract widespread attention from the market after it is listed on all top exchanges.

The price structure of this token is perfect and it is currently in phase 3. I will wait for the price to clearly break through and regain key positions before entering the market.

In addition, this token is also associated with a large NFT series. With the recovery of the NFT market, the implementation of the $ME incentive plan, and the potential launch of the Opensea token, it may bring further upward momentum.

4. $ORAI

$ORAI is a veteran AI token. Last week, it successfully recovered stage 4 (orange area) in the short-term market structure, so I bought some positions again.

If the price pulls back to this range again, I will continue to add to my position.

In addition, I have set a price alert, and when it breaks above the low of the macro range, it will become a new entry signal.

5. $TIA

I have been holding TIA since it reclaimed and retested the range low.

Currently, it is trying to break out of the current price structure. I think the subsequent pullback will be a good opportunity to add to the position if the price forms a clear breakout above the gray area.

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