In the previous article, we talked about how the changes in Bitcoin’s market capitalization share (BTCD) can be used as a reference dimension for us to switch between large and small currency tracks in the market.
At that time, I shared that in the last round, the highest market value share of Bitcoin reached 72%, and the highest in the previous round was about 90%.
My view for this round is that 60% may be the limit, and it may not even reach 60%. This is because the industry is developing, the ecosystem is continuously enriching, and therefore the overall volume (denominator) is constantly increasing.
In addition, before I wrote the article, a friend sent me a private message saying that if the SEC continues to take action against many altcoins, will the altcoin market be a bloodbath?
If they really do it one by one, then the situation described by this friend will indeed happen.
In the past history, it would be a reference to use the domestic 9-4 in 2017 as a reference.
Of course, I am not here to FUD you all, I am just sharing my personal opinion on the idea proposed by this partner today.
For the altcoin market, we have found a very obvious rule: when the market is more certain, the capital flowing into the altcoins will be more fierce, and when the market is more uncertain, more funds will flow into Bitcoin (this is a relative term).
It's obvious then, is there more certainty at this stage?
To be precise, from a macro perspective, the certainty is not high (but it is higher than last year).
In addition, we have indeed seen the altcoin market because the SEC recognized some tokens as securities last month, which is indeed a blow to the altcoin market.
We often say that altcoin is actually a new startup. Since it is a new startup, no one knows what kind of setbacks and difficulties it will encounter along the way.
Therefore, when it comes to copycat configuration, I have always adhered to the 6211 principle. For those who are more conservative, you can even adjust it to 721 or 811 (this ratio is the ratio that real experts have configured before, not all at once).
You still have to adjust your position based on your risk preference.
Recently, I saw several friends around me, who are all veteran investors, but they suffered a lot of losses in this NFT market crash, and many of them lost at least 100 ETH.
The reason behind this is that people are too optimistic about new products and have too much faith in the top stocks. Another core reason is that they did not buy them cheaply enough.
I have never put too much energy into NF.T. I personally also hold some monkey land, but not much, so of course I have definitely suffered losses. The big losses suffered by my friends this time should also serve as a warning to us.
So I have two thoughts about buying into Shanzhai:
When we buy a copycat coin, we should think, it looks good now, but if after a period of time, this copycat coin continues to fall, 20%, 30% or even cut in half, what will I do? Will I continue to hold it or decisively sell it at a loss?
Let's continue with the above question. If we continue to hold it, will it be cut in half again? Can we afford it?
Is the current price really a very cheap price? If the price is cut in half after a period of time, and I am still optimistic about it, should I dare to cover my position?
Whether you dare to cover your position actually involves two dimensions of thinking. One is whether you still believe that the target has a future, and the other dimension is whether you still have the bullets to cover your position.
Often times we think that the target still has promise and a future, but in fact we have run out of bullets (they were used up early).
If you think about the above questions, I think it will be clearer how to set the copycat buying point and how much to buy.
I think this is my in-depth thinking after seeing the recent plunge in the NFT market and some friends suffering huge losses. Although it did not happen to me, it is enough to attract my attention.
My personal strategy of investing in altcoins, based on what I consider to be a margin of safety, is generally to continue investing for a longer period of time (I have suffered losses from investing too early).
That is to say, from a strategic perspective, we can be more casual about the strategies of Bitcoin or Bitcoin, but we need to be more cautious and careful about the strategies of altcoins (position ratio).
Having said that, at this stage, the prices of many high-quality copycat products are actually already in the investable range below the safety margin.
btc20272027 (watch the circle of friends)
That’s all I’m sharing today. If you have any questions, please leave a message in the comment section.