The Ultimate Strategy to Step into Altcoins: Insights from Crypto Analyst Michaël van de Poppe
Michaël van de Poppe, a renowned crypto analyst and the CEO of MN Trading Consultancy, recently shared his insights on how to strategically enter the altcoin market without falling prey to the pitfalls of FOMO and market hype. In his guide, titled “The Ultimate Strategy to Step into Altcoins,” he aims to arm investors with the knowledge to make informed decisions.
Finding the Right Timing
Van de Poppe emphasizes the difficulty many face when trying to navigate the highly volatile altcoin market. He highlights a common misstep among investors, pointing out that between 80-90% of buyers purchase an asset in the last 10% of its price movements. This statistic underlines the herd mentality prevalent in the investment world, where many are drawn to an asset only after witnessing significant gains, often too late to realize similar returns.
Beware of Market Hype
Market hype, especially as it manifests on social media platforms, can be deceptive. Van de Poppe cautions investors against making decisions based on the heightened visibility of an asset, which often signals it is nearing its peak. He advises that once you start seeing hype increase on social media, you’re probably relatively late to the party.
Contrarian Approach
Van de Poppe argues for a contrarian approach to investing. He suggests that the greatest opportunities lie in moments of widespread doubt or negativity. For example, after the collapse of FTX, Bitcoin’s price was swimming around $15,500 per Bitcoin, and almost no one was interested in getting into a position. This contrasts with the period leading up to the ETF approval when Bitcoin was trading at significantly higher prices, illustrating the heightened risks associated with entering the market during periods of optimism.
Avoid Chasing Rallies
One of the most emphatic pieces of advice from van de Poppe is to avoid the temptation of chasing rallies. He advises that it’s always better to wait for a correction and recommends waiting for an altcoin to correct by 25-60% from its recent peak before considering an entry. This indicates that buyers are likely to take over and the risk/reward is more positive.
Examining Altcoin Market Capitalization
An alternative approach suggested by van de Poppe is to examine the total market capitalization of altcoins using metrics such as Ethereum (“TOTAL2”) or without ETH (“TOTAL3”) on TradingView.com. These metrics can give an indication of what stage the market is currently in – a Bitcoin dominance phase or an emerging altcoin season. At press time, TOTAL3 stood at $546 billion after surpassing the crucial resistance at the 0.236 Fibonacci retracement level.
Hot Take: The Art of Entering Altcoins
In the volatile world of altcoins, strategically entering the market can be challenging. However, by following certain principles and strategies, you can increase your chances of making informed investment decisions. Michaël van de Poppe’s insights provide valuable guidance for navigating this complex landscape.
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