A cryptanalyst and a designer of tools for the Python Quant capturadora known as Crypto Quantic Ph.D, expressed on account of the impending bull market altcoins and gave some practical recommendations to investors. We offer you to familiarize yourself with them.
«Rule No. 1: Never lose money. Rule No. 2: never forget rule No. 1» — Warren Buffett
So, you bought some number of altcoins, hoping to catch a wave and get five, ten or even a hundred times more than you invested. If so, then do not worry, you are not alone. The so-called «altcoins season» returns, as evidenced by numerous posts in social networks.
However, you were hoping for this:
And get this:
Course altcoins fell faster than the reputation of Kevin spacey, not only to bitcoin, but also against the USD.
Before, I share valuable tips, let’s look at the development of the situation over the past few months.
I believe that in this period we witnessed the «perfect storm» of three interacting forces. Let us look at each of them, and then I’ll give you five recommendations that will help you to prepare for the impending return of altcoins.
Problem # 1: too many people waiting for the return of altcoins
One of my favorite quotes belongs to American billionaire Bernard Baruch, who once said: «the Main purpose of stock exchanges is to fool as many people as possible».
If there’s one thing I have learned over the years is the fact that if all «know» about future changes in the market, these changes will never come. The gods of the stock market will not allow it.
For example, have you ever noticed that as soon as the company publishes its earnings report after the successful quarter, the company’s share price instantly drops? This tendency of markets to respond to events before they occurred, is called «discounting». For this reason, there is the famous phrase: «buy the rumor, sell the news».
With the development of cryptorhynchus, increasing the value of the information. Gone are the days when you could be confident in choosing a particular coin, only on the basis of the latest updates developers or altcoins listing on the exchange. Just remember: the more people predict an event, the less likely that it will actually happen. Not everyone can win, someone must lose.
Problem number 2. The cyclical nature of the market rules over all
If you are not familiar with classical chart market cycle based on emotions of players, then drop everything you’re doing and read about it.
Market cycle is a universal pattern of behavior that is displayed in the development of all assets and present at all time intervals. Look at the charts of gold, Dow, bitcoin in 2013, USD or even the electrocardiogram of the heart. We meet it everywhere.
Market cycle can be described as an impulsive wave movement, where every ascent is followed by a decline. This behavior is explained by the striking reasons that you can write books.
But yet, everything you need to know is:
1. Usually, a new pulse does not occur until the end of a «cycle of decline» and decreases volatility. (See. the figure below).
2. This fall altcoins have been in a cycle of decline.
In the period of the cycle of decline of small adjustments to give investors hope that it’s going to rise, but each time disappointed. Familiar with this situation?
Problem number 3. The low liquidity adding fuel to the fire
The asset is considered liquid, if you can easily sell and buy it, without affecting the price. For example, imagine that you buy a share of Walmart (the world’s largest retail chain). To buy and sell these shares easily, since it was released a large number of shares of the company, and if you buy one or two it almost does not affect their price.
Now imagine that you sell your house, and you — one of the three sellers of real estate in your area. Your neighbor decided to sell his house, but at a price much lower than yours. Now you have to lower the price of your house because of one single vendor. This is called the market of illiquid assets.
One way of assessing the liquidity of the asset — look at the number of sellers and buyers. We can estimate this figure by looking at the trading volumes. Below is a graph 600 of the first altcoins compared with bitcoin.
We see that bitcoin alone controls about 40% of the trade volume of all cryptocurrencies. And 90% of the trades happening Althingi of the top 10.
Why is it important?
This means that if I as an investor would take $1,000 from Aldona and invest it in bitcoin, the price Aldona, in most cases, will decrease considerably, while the price of bitcoin will rise not so much. Now multiply that by millions of investors and you will understand how the slightest excitement of the bitcoin exchange rate could cause real chaos in the market of altcoins. However, liquidity is not always a bad thing. Tenfold and hundredfold growth we’ve seen in the past on the market of altcoins, due to the low liquidity: something that depreciates quickly, it can also quickly rise in price and Vice versa.
When you’re waiting for the return of altcoins?
In their hunt for mnogoobescajuscij Althingi, I am always guided by five factors:
One of the altcoins have become a leader and lead the rest, showing what he’s capable of. (Whether this was the case with Bitcoin Cash?).
The long-term trend in the decline should stabilize and altcoins should start to trade in a narrow range (the classic Bollinger Band).
The crossing of moving averages on the longer time frames.
Altcoins are beginning to set a higher daily lows.
Twitter ends’or #ANTIVIRUSSECURITY!!!
Good luck, let the trend will always be on your side!