Decoding the copycat season: 6 major warehouse building strategies to help you grasp the copycat market

Author: CryptoAmsterdam

Compiled by: TechFlow

1.When will the Altcoin season arrive?

I believe the Altcoin season will arrive soon, and here are some key analysis points:

1.1 The cycle has two phases

• Phase 1: Bitcoin price rises, Altcoin prices fall (Bitcoin market dominance increases).

• Phase 2: Bitcoin breaks a new all-time high, Altcoins start to enter a rapid upward phase.

The pattern can be seen more clearly in the chart below:

In this phase, we start accumulating Altcoins when the total Altcoin market cap is at a low point. I believe Altcoin prices will break new highs like Bitcoin.

Currently, Phase 2 has already started!

For more details, please see: link.

1.2 Capital flow patterns

The bull market can be traced back to the end of 2023, when Bitcoin bounced back from the bottom, returned to the range and rose to the previous high, while Altcoins depreciated against Bitcoin, and Bitcoin's market dominance increased.

When Bitcoin breaks a new all-time high (the current stage), capital begins to flow into large-cap Altcoins. From the Total 3 (total market cap of the top 100 Altcoins excluding BTC and ETH) chart, although it is currently mainly driven by large-cap coins (such as XRP), the performance of mid and small-cap coins is also catching up.

Ultimately, the capital in Bitcoin and large-cap coins will gradually flow into mid and small-cap Altcoins.

As market sentiment heats up, investors will become more greedy and start chasing mid and small-cap Altcoins. I expect the "Others" mid-cap Altcoins to reach new highs. The true Altcoin season is still ahead.

1.3 Bitcoin Dominance

There is a similar pattern in each cycle: when Bitcoin price breaks through the previous high and reaches a new high for the first time, its market dominance will start to decline.

Currently, Bitcoin Dominance has broken a rising trend that lasted for more than 800 days.

1.4 ETHBTC trend analysis

In each cycle, Ethereum tends to perform weakly in the early stage (Bitcoin rises but still below the previous high), and then starts to rebound when Bitcoin consolidates above the previous high.

The current cycle is no exception. More capital is expected to flow into Ethereum ecosystem Tokens, on-chain utility Tokens, and high-risk Tokens. Once ETHBTC truly enters an upward trend, these Tokens will perform even better.

ETHBTC chart analysis

Currently, ETHBTC has retested and regained the low end of the range.

In 2021, it failed to break through the resistance of Stage 4. In this cycle, will we see the "super uptrend" of Stage 5?

If it breaks the current downtrend line, it will end a bearish trend that has lasted for over 1100 days.

Additionally, 2024 is an important year for the launch of the Ethereum ETF (Exchange Traded Fund), and I believe the market is still underestimating Ethereum's potential.

2.Have you missed the opportunity?

As mentioned earlier, the Amsterdam team has accumulated Altcoins during the low points of the Total 3 market cap over the past 5-6 months.

At the low end of the range, it is recommended to:

• Buy at key support levels;

• Build positions gradually in a slowly oscillating market, rather than chasing the rally;

• Set clear stop-loss levels (such as the lower end of the range);

• Market volatility is lower, making it easier to hold.

But if you choose to buy after the price has risen vertically:

• You may not have a clear stop-loss level. This may not have a big impact on short-term traders, but for long-term investors, the lack of a stop-loss increases the risk.

• The opportunity for gains from the low to the high of the range has already disappeared, and now the bet is whether the Altcoin market cap can break new highs.

• When buying during the rapid upward phase, you will face higher market volatility, and 20-30% corrections are not uncommon.

So, I don't think you're too late, because:

• Bitcoin still has upside potential.

• The capital rotation has not yet fully reached the mid and small-cap Altcoin stage ("Others" chart shows potential to reach new highs), so the most profitable phase is yet to come.

• Bitcoin's dominance may continue to decline, while the ETHBTC ratio is likely to rise.

But please note the following:

• Understand the current stage of the market cycle.

• Clearly define whether you are entering a coin for short-term trading or long-term investment.

• Develop a clear profit plan.

• Understand this is a high-volatility phase, with the potential for 10%-30% rapid declines.

• Accept that these rapid declines are difficult to predict, and trying to trade these corrections may disrupt your longer-term investment plan.

For a "risk" analysis of entering this stage (rather than the past 3-6 months of accumulation):

Please refer to this.

3.Recommendations for entry:

If you missed the accumulation period over the past 6 months, first think about why you missed it.

It's likely due to the influence of emotions:

• In a bull market, prices often rise very quickly, with almost no obvious and sustainable corrections.

• Many people missed the uptrend opportunity, and when they "fear missing out" and chase the highs, the market often enters a consolidation or rapid decline phase.

• In the consolidation, they become pessimistic again and ultimately miss the next rapid uptrend opportunity.

The right strategy is to: build positions in batches during the consolidation orcorrection phases, maintain patience, and focus on the market structure over a longer time frame.

For more details, please refer to this.

Here are the specific recommendations!

Recommendation 1: Stick to spot trading, avoidleverage

Prioritize spot trading.

Many people are used to using leverage, but this is actually a trap. Each market fluctuation makes them feel like an "opportunity", but in reality, most of the time it is not. You don't need to rush to trade. Leveraged trading will ultimately cause most people to lose or even go to zero - don't let it ruin your bull market gains.

Stick to spot trading, so you won't be forced to liquidate your positions due to over-leveraging, and miss out on market opportunities.

Trust me, stay away from leveraged trading.

Recommendation 2: Don't chase the rally, focus on corrections

Most people trade based on emotions, only buying when the price is rising (green candles), because this makes them feel "safe".

But the market won't go up in a straight line, even in a bull market there will be corrections:

• Daily fluctuations: small corrections of a few percentage points.

• Every few weeks: 10%-30% panic sell-offs.

Here is the English translation of the text, with the terms in <> retained as is: If you buy when the price is rising, you are likely to sell out of panic when there is a pullback. Buying when the price is rising will make you feel comfortable. Selling when the price is falling will make you feel relieved. But the correct strategy is: Buying may make you feel afraid, but this is the right time. Selling may make you feel reluctant, but this is a rational choice. If you can trade against the trend, build positions during pullbacks, and boldly buy during panic-driven declines, you will have an advantage over most people. Suggestion 3: Build positions in batches, operate patiently So far: - Only choose spot trading. - Do not chase the rally, but build positions during pullbacks. Furthermore, you do not need to invest all your funds at once. You can choose to build positions gradually. If the price drops 5%, you invest all your funds in at once, then if the market experiences a larger adjustment (such as a 10%, 20%, or even 30% decline), you may sell out of panic. The correct strategy is: when the price drops 5%, first invest 10% of your funds. This way, when there are larger pullbacks later (such as 10%, 20%, or 30%), you can continue to add positions gradually, instead of being forced out of the market by market fluctuations. What if the pullback does not deepen further? No problem. Do not invest all your funds at once out of fear of missing out, as this may force you to exit in a deeper pullback. There will be more pullbacks and opportunities to build positions in the future. In a highly volatile market, you cannot perfectly time every fluctuation. You also do not need to buy at the lowest point or sell at the highest point, just focus on long-term gains. Suggestion 4: Control risks, avoid excessive risk-taking You may have heard of the legendary stories of those who made millions by going "cross margin", but excessive risk-taking will greatly test your psychological endurance. If your position is too heavy, you may be forced to sell out of panic during market pullbacks, ultimately missing out on greater opportunities. Suggestion 5: Develop a plan that suits you Do not directly apply someone else's plan, but develop a clear investment plan based on your own goals and risk tolerance. This plan should include risk management and multiple contingency plans in case the market trend differs from your expectations. A good plan can help you remain calm in market fluctuations, avoid making wrong decisions due to panic or excitement, and also help you gradually realize profit-taking. The following are a few points that need to be clarified in the plan: - **Keep it simple**: Do not make the plan overly complex. - **Focus on the long time frame (HTF)**: Focus on the big trend, not short-term fluctuations. - **Clarify the objectives**: - What market signals do I want to see? - What Tokens do I want to invest in? Why choose them? - How much capital do I plan to invest? - At what price ranges will I build positions in batches? - When will I exit? Regarding how to develop a periodic profit-taking plan, you can refer to [this tweet](https://x.com/damskotrades/status/1864423005918515236). Suggestion 6: Focus on the long time frame, keep the strategy simple - Only focus on the long time frame (HTF) charts, avoid being distracted by short-term fluctuations. - You only need to focus on the key price ranges and market structure, without paying attention to too much market noise. - Keep the strategy simple and clear. Even a simple strategy can give you an advantage in the market: - Most people use leverage trading, but you do not. - Most people chase the rally (green candles), but you do not. - Most people do not have a clear profit-taking plan, but you do. - Most people buy or sell all at once, but you choose to build positions and exit gradually. **Before sharing my observation list, let me discuss an important point:** **Viewpoint:** In the current market, ("Others" market cap) is expected to hit new highs and attract capital inflows from and mainstream cryptocurrencies. The "Others" market cap has already slightly exceeded the mid-range and is gradually approaching the high end of the range. It should be noted that the high end of the range is usually a strong resistance area, and there may be multiple tests and pullbacks before a breakthrough. This is often overlooked when the market is performing strongly (such as an all-green day today). Recalling 's performance before breaking through the high end of the range: it experienced multiple pullbacks and fluctuations before successfully breaking through. Even looking back at the previous bull market cycle, when the season was just beginning, the "Others" market cap chart had experienced a 30% significant pullback before breaking through the high end of the range. **So please keep the following in mind:** - Before the full-fledged season arrives, the market may experience a significant pullback, and there may even be weeks of downward trend. - But do not try to predict these pullbacks and wait, instead adopt the following strategies: - **Build positions gradually**: Gradually increase your positions, do not invest all your funds at once. - **Avoid using leverage**: Leveraged trading is extremely risky and may lead to forced liquidation. - **Buy during pullbacks**: Focus on building positions when the market is declining (red candles), rather than chasing the rally (green candles). Remain patient, follow the long-term strategy, and you are more likely to profit from market fluctuations. 1. <$SOL> is a currently strong-performing large-cap cryptocurrency, showing clear advantages in this market cycle - it is a worthy choice to focus on. From the perspective of the market cycle, I expect to break through the current range high and have significant upside potential when the price enters the "price discovery phase" (i.e., when the price reaches a new all-time high and the market explores its true value). Currently, you can consider building positions in batches, but you need to be aware that the current price is in the resistance area of the range high. If you buy all-in, you may have difficulty withstanding a possible 10%-30% price pullback in the future. Therefore, it is recommended to strictly follow the plan of building positions in batches. Also, it is recommended to use spot trading and avoid leveraged operations. Here is my operational thinking: - Wait for the price to break through the range high, then build a small position first. - If the price continues to rise and stabilizes at the high, you can continue to add positions in batches. - If the price falls back to the lower end of the range and then breaks through again, this is another opportunity to add positions. - If the price pulls back to the previous oscillation range, this can also be a time to build positions in batches. - When the price rebounds after a pullback and breaks through the short-term downtrend line, you can also consider adding positions. In summary, you need to develop a clear contingency plan for various possible market movements and gradually build positions through spot trading. 2. <$BLUR> is a relatively special cryptocurrency. Earlier this year, it failed to hold the low end of the Stage 4 range (i.e., the price support at the low end failed), which may have been due to the overall depression in the NFT market at the time. Now, the NFT market is recovering. Opensea may launch its own token, and Magic Eden's token will also be launched next week. Driven by these positive events, combined with the current market and chart performance, may regain market attention. My main observation point is: whether there will be an opportunity to build positions when the price regains the low end of the range (as indicated by the arrow in the chart).

If the market falls again, you can also try to build a position at the low end of the stage 3 range.

However, for me, this token is more suitable for short-term trading rather than long-term holding.

3. $MEME

The investment cycle of Meme-themed tokens is well known even to ordinary investors. I can hardly imagine that a token called "MEME" will not attract widespread market attention after being listed on all top exchanges.

The price structure of this token is very perfect, and it is currently in stage 3. I will wait for the price to clearly break through and reclaim the key position before entering the market.

In addition, this token is also associated with a large NFT series. With the recovery of the NFT market, the implementation of the $ME incentive program, and the potential launch of the Opensea token, it may bring further upward momentum.

4. $ORAI

$ORAI is a veteran AI token. Last week, it successfully reclaimed stage 4 (orange area) in the short-cycle market structure, so I bought some positions again.

If the price falls back to this range, I will continue to add positions.

In addition, I have also set a price alert, and when it breaks through the macro low point, it will become a new entry signal.

5. $TIA

I have been holding it since TIA reclaimed and retested the low end of the range.

Currently, it is trying to break through the current price structure. I think if the price forms a clear breakthrough above the gray area, the subsequent pullback will be a good opportunity to add positions.