The Failure of Buying Cheapest Coin Theory

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Crypto trading is still a major problem where inexperienced investors hope to get rich by buying altcoin at the lowest price as many beginner traders did in 2017 but failed or collapsed.

At present, most traders do not expect Bitcoin (BTC) to go up 50% or more in one week because it is rather unlikely that will happen. However, many of these same investors are even willing to place their funds in cheap altcoin, of course, with the hope that buying cheaper cryptocurrency will result in higher returns.

A quick review of the CoinMarketCap index shows that 39 coins from the top 60 coins cost under $ 3 on July 12. Investors who want to profit immediately from these cheap coins must struggle to choose coins that are likely to increase in price.

There is no clear definition of the altcoin season, though it usually involves a significant reduction in Bitcoin dominance. A 3% reduction in the Bitcoin dominance chart could attract valuations of $ 8 billion, and shift to an alternative cryptocurrency or altcoin market worth $ 100 billion.

By analyzing 15-day periods over the past year, one can find altcoin euphoria moments, which tend to occur in both bullish and neutral cryptocurrency trends.

Because Bitcoin loses a significant support level or even faces a bearish trend, most investors still tend to avoid risks to altcoin and choose to stay away, which causes BTC dominance to continue to increase.

During the last four periods of altcoin which experienced a price increase against the price of Bitcoin, the three cheapest coins succeeded in surpassing only in one case. On average, 69% of sub-$ 3 cryptocurrency performs worse than the altcoin market.

On average, 40% of low-priced coins successfully complete the 15-day period by 10% or more. Therefore, it is safe to say that buying cryptocurrency at a low price is not the best choice for investors to choose from during the altcoin rally.

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2 years ago

A very good analysis and eye opener.

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3 years ago