Trading Insights
Over the past years of observing crypto markets, we came to various conclusions about cycles, money flows, risk and others.
- Understanding money/active user flow is key (not volume, not price, but money in/out)
- Crypto is pumped by a small number of hedge funds with borrowed capital
- Usually new cycles start after 1-2 years of total silence (when everyone forgets about crypto)
- Highly negative/positive funding rates might cause short-term liquidity hunts
- Bull markets need a narrative. 2017 it was ICOs, 2021 it was NFTs/M2 money supply growth
- Money flows from BTC to ETH to large caps to memes/low caps
- There is no over or under valued for crypto tokens because most tokens are based on hype
- Buying a random meme at the right time > buying a token with strong fundamentals at the wrong time
- Holding tokens for the long-term is a bad strategy, except for a handful few (BTC, etc.)
- New exciting technologies (AI in 2023/2024?) usually start a bull market
- Expects markets to pump higher than expected in bull markets, and go lower in bear markets
- Cycles provide 3-6 months of opportunity to enter (during bear) and exit (during bull)
- Never enter/exit a position fully in a single day
- A big indicator for bull markets are 100% pumps of random projects (track the frequency to determine opportunity)
- There are many opportunities- if one doesn’t look good enough, pass and look further
- 20% of trades cause 80% of returns (the rest is not worth taking)
- Better to stay out of the market than being in the market at bad conditions