Reverse thinking: Which mainstream coins did not rise in the bull market? Will they rise later? (In-depth)

1. Price ratio, the third independent factor of the Chaos Theory

The prices of assets of the same type will also be somewhat consistent. For example, if housing prices in Beijing soar, they will also rise in Shanghai. If Ethereum soars, Bitcoin will also soar. In the stock market, even Tencent will rise with Tencent.

The better the correlation, the better the consistency of the currency price trend, such as the forked brothers BTC, BCH and BSV, DEFI, and platform coins. This is a sector effect in the stock market.

The logic behind the rise of mainstream coins is that the world is releasing money, and the water flows into the blockchain. Since they are all mainstream, they all have large capacity and much exposure, so of course the water will flow in. Although there are different inflows, no one will be left behind, and the water is level.

2Who is the mainstream currency?

Tsinghua University and Peking University would not say they are in the top 3. Those who say they are in the top 3 must be the five or six. LINK does not say it is an altcoin, unless LTC is also an altcoin, so it is unreliable to say so.

There has to be a three-party standard. As mentioned in the previous article, Binance and Coinbase have first-class coin selection capabilities, so we will follow their standards. Binance has a lot of domestic products, so we can just use this.

The characteristics of mainstream coins are large traffic and many people playing, which makes them suitable for contract coins to make money. So we arbitrarily believe that Binance Contract is a mainstream coin. BSV cheated Gavin and Jihan and was kicked out, so we regard it as non-mainstream.

3. Correlation of mainstream currencies

Since the beginning of this year, the largest mainstream currency has increased by 5 times, while the smaller ones have not increased at all.

Compared with the digital currency, which can increase by hundreds of times at any time, the difference within 10 times does not seem particularly large, not to mention that there are more than 30 kinds of coins. Draw a graph, the darker the color, the stronger the correlation. It is quite related, isn't it?

The core of the price ratio relationship is correlation. It is best to analyze the relevant logic to deal with sudden changes in logic that may lead to failure. The logic here can be considered as the fundamentals of the three independent factors of the Chaos Theory.

4. Which ones are lagging behind in growth?

In fact, for currencies with good correlation consistency, a separate strategy can be developed. If the volatility exceeds the average, there is a high probability of regression, and the reverse operation can be performed. For example, if everyone else rises a little bit, but you rise a lot, then short you. Otherwise, go long.

The leading stocks can be operated as leaders, which is also a strategy. After all, the strong will become stronger as written in the Bible. Strength indicates high level, and strength will accumulate. Of course, pigs that are blown by the wind will have accidents.

As for those whose growth rate lags behind, they will most likely have to catch up with the surge in the event of a flood of money. If one person rises to the top, everyone will rise to the top. Even if Bitcoin rises to the top, air coins are valuable. Now that they have become mainstream coins, the team will definitely find a way to increase their value.

The growth of the top ten lagging coins at the beginning of the year (left) compared with the latest wave of growth (right): BNB, ETC, DASH, NEO, THETA have caught up and moved ahead. The accuracy rate is about 50%.

5. What are the stocks that have lagged behind in growth and have not yet made up for the increase?

Let’s analyze the five that continue to lag behind: COMP, BAT, IOST, ONT, DOGE. Add BTC as a comparison currency. Use the data from the last month to try a short cycle.

The growth of these five mainstream coins is not big. If you ambush them, you will at least make a profit in the long term, and you won’t lose too much. But in line with the principle of selecting the best from the best, we are still selecting them, striving for a short period of time and early profit.

It is obvious from the above chart that ONT and IOST have surpassed BTC since July, and ONT has surpassed BTC for the longest time. From this, we can roughly judge that ONT is more likely to make up for the loss in the near future.

Now that we have the exchange rate relationship, we can combine it with the fundamentals and K-line analysis of these five currencies. If the conclusions are consistent, then we can be brave enough to ambush and the success rate can be guaranteed from a probabilistic perspective.

ONT's fundamentals are OK: it is a public chain, invested by Sequoia, with low circulation and easy to pull. The decision makers understand technology and finance, and they also solve the hard demand of identity authentication. The risk is of course that the currency is not dispersed enough and there is a large amount of locked-in shares.

The K-line has been rising steadily for nearly 5 months from March to now. If we wait for a pullback safely, the risk will not be too great if the radicals just ambush us.

Risk warning: Good traders either seek financial freedom and seek immortality, or concentrate on making money and striving for enlightenment. Most stock reviewers and writers have average trading skills and are only for reference. They do not constitute any investment advice. Please pay attention to the risks.

Author: Zhao Yutao

Editor: Wu Talks about Blockchain