GuShiio.com Short-term band or diamond hand? This is a problem.
Author: 1912212.eth, Foresight News
Once upon a time, Zhao Changpeng’s saying,”If you can’t hodl, you won’t get rich” was regarded as the golden rule of investment in the currency circle. Buy, hold and hold firmly, and then sell when you are profitable to gain huge profits. The HODL concept was once very popular in the circle.
Some investment institutions have achieved very generous returns through in-depth research and bets. For example, first-class positions have achieved hundreds or even thousands of times of gains on MATIC and AAVE in the last cycle. Various legendary wealth stories have made retail investors generally believe in the power of diamond hands. However, if this investment concept worked relatively well in the last cycle, this cycle has no longer been believed in by the market, especially by players full of copycats.
Under the four-year cycle, the market structure has undergone considerable changes. If the style cannot be adjusted in time, we often face the risk of standing guard on the top of the mountain. Is the market really no longer rewarding diamond players?
1. Memes and AI become the main theme, and the general cycle is no longer
In the past cycle of the crypto market, it often reached a general boom half a year after BTC was halved. Market funds gathered from Bitcoin, then reached a certain level and began to spread to Ethereum. Secondly, they flowed into mainstream altcoins. Finally, small-cap copycats and memes danced in chaos. A typical bull market cycle came to an end.
In this cycle, the first wave of rising waves was advanced due to the positive events of Bitcoin Spot ETF. After BTC ushered in its own high moment, the encryption market was silent for a long time. It’s hard to wait for the increase in the Q4 quarter of 2024, but it seems quite short-lived.
If you have embraced popular assets such as Bitcoin, SOL, and Dogcoin early this cycle, the gains from diamond hands are very substantial. But if the altcoin you choose is not popular with the market, such as re-pledge, inscription, games, NFT and other tracks, then the book return will be “miserable”.
Recently, when coins that have been criticized by the market have been put into new coins, they often peak when they are launched, and then decline all the way. Projects with slightly better quality and popularity may usher in a rising period, while projects that are not popular and useless and are constantly unlocked will have weak buying and continue to innovate at historical lows. If the diamond player unfortunately chooses an unpopular currency on an unpopular track and keeps taking it and refusing to sell, there will be huge losses.
In addition, compared with DeFi and NFT, which were more popular in the previous cycle, there were no real out-of-circle innovations in this cycle that could compete with them. Market funds have been stagnant in Bitcoin, memes and AI concept coins for a long time.
The figure below clearly shows that Bitcoin’s market value has dropped sharply in 2017 and 2021, due to the general increase in copycats. When 2023 comes, Bitcoin’s market value share has begun to climb, rising from 38% and even exceeding 60%. In contrast, Ethereum is troubled by multiple factors, and its market value has been declining since the beginning of 2023.
Historically, it has been difficult to see the so-called general growth and counterfeiting season when Bitcoin’s market value is rising.
Today, the market seems to reward only diamond-hand players who hold very few coins such as Bitcoin.
2. The performance of mainstream shanzhai fell short of expectations
Compared with the previous cycle, the difficulty of this round of copycat market is no longer the same. Taking L1 in the above cycle as an example, taking the lowest point after the launch of Binance, DOT’s highest return exceeds 20 times, NEAR is nearly 40 times, AVAX is over 40 times, SOL is over 250 times, and UNI in the DeFi field also returns more than 20 times. The wealth effect of the industry is very significant.
Among the infrastructure L1 in this cycle, except for SOL/SUI, the performance of the rest was unsatisfactory. In L2, OP achieved a maximum return of 10 times, and ARB achieved a maximum return of 3 times. After setting new highs, both fell to the bottom range within five months. The ARB even fell from a record high of $2.42 to a record low of $0.34. Stable currencies such as USUAL/ENA have recorded significant returns, but they are all less than 10 times from the bottom.
Some projects that are highly sought after by VC Capital have performed poorly, with EIGEN returning up to twice, which has now hit a record low. After re-pledging ETHFI and RENZO and even launching Binance, the new low model began. IO returns of up to 2 times, which has also hit a record low.
More and more players are no longer willing to accept high-valued VC coins. After accepting VC coins, whether new or old projects, market participation has reached a discount.
In addition, data from CoinMarketCap and CoinGecko shows that there are currently more than 20,000 types of altcoins (excluding low-market capitalization memes), which is 2-3 times that of 2021. The wide variety of tokens and the prosperity of memes will inevitably have an impact on the attention of mainstream copycats, and the returns will correspondingly decrease.
3. MEME market is fast and intense
VC coins, which have attracted much attention in previous cycles, are no longer popular. After market players could not find the hard-to-find wealth effect on CEX, they chose to dig gold online.
Solana’s trend towards local dogs has swept the industry. It is undeniable that the wealth effects of memes such as WIF/BOME/TRUMP have attracted great attention in the market. However, if you choose diamond hands and have not yet cashed out, the profits from the retracement will be several times higher.
WIF has risen to around US$4.8 since the launch of Binance, and has now dropped to US$0.8. BOME has a maximum of US$0.029 since its launch of Binance, but now its price is US$0.002. Although TRUMP has brought wealth effects to some players on the chain, if you didn’t choose to take profit and leave at the peak of the market, US$70, TRUMP would drop to a minimum of US$16 in just a week or so.
MEME may seem fair, but in fact, it is not small. The pace of growth and decline of market targets is getting faster and faster, and participants who run slowly can easily be seriously trapped.
Taking AI-based meme GOAT as an example, on October 23, 2024, trader Nachi tweeted that “it received 4% of the total supply of GOAT.” This will be the best deal this cycle,”when GOAT was around US$0.5. On December 12, Nachi still stated that he held GOAT, and the price of GOAT was US$0.84. Since then, the situation has suddenly declined. First, ACT stole the limelight, and then AI agents such as VIRTUAL lost its popularity. The currency price once fell below US$0.1, while the highest price in GOAT history was US$1.37.
For example, Moonshot, which is famous for its memes, Foresight News selected tokens launched on the Moonshot platform from November 2024 to January 2025 as research samples. Among the 116 online tokens, only 17 have current prices higher than their online prices, accounting for less than 15%. The vast majority of projects are currently in a downward trend, with declining projects accounting for more than 85%.
The true and cold data tells market players that it is not easy to pick a good target and get high returns from the market at a low cost. It is normal for MEME to fall by more than 80% or even return to zero.
The fast pace and high intensity of MEME have also spread to some copycat markets where liquidity is already precarious. Those exchange copycats with low narrative ceilings, no popularity, and high valuations have ushered in “dark moments.”
4. What should I do?
From the perspective of the large cycle, the market is demanding more and more diamond players. First of all, we need to judge market sentiment and the range of top take-profit. If we make the mistake of taking and not selling, all profits may eventually be wiped out. Secondly, the targets must be carefully selected, and the targets worthy of diamond hands must be very careful. Once you choose the wrong track, even if the bull market comes again, it may not have anything to do with you.
Generally, you should not make diamond hands on Memin tracks.
Cash in and leave the market in time to improve your life is also one of the better ways. Reducing positions can help reduce the pressure on subsequent positions. Once a large retracement is encountered, the realized profits can ensure that there are still opportunities to capture funds in the future.
