When the tide goes out, what kind of shells are worth bending down to pick up?
1. The night that changed emotions
On the night of October 11, I was on the phone with a few market maker friends. The fatigue in their voices came through the waves: 'Liquidity has dried up, many small-cap projects can't handle the selling pressure at all.'
At the same time, there was wailing in my community. A friend shared a screenshot—his heavily invested popular token dropped 60% within an hour, nearly erasing all his earnings from the past six months. He asked me, 'Is the altcoin completely finished?'
I didn't answer immediately but opened the data panel. What I saw was: a brutal reshuffling is underway, not the end of the entire track.
2. The current real situation: differentiation rather than extinction
1. Liquidity stratification has become a certainty
The sharp drop of DAT is like a watershed, clearly dividing the market into two camps:
Projects with real liquidity: there are still market makers maintaining the market, with stable daily trading volume;
Zombie projects: trading volume shrinks by more than 90%, buy and sell depth is as thin as a cicada's wing.
The significance for ordinary investors is: every trade you make now may face huge slippage costs.
2. The withdrawal and choice of market makers
I have learned that many small and medium market makers have begun to reduce the number of services they offer, concentrating resources on a few high-quality targets.
This means: a large number of small market cap tokens will face a "no whale state"—prices may stagnate for a long time or may crash due to a small sell order.
3. Structural changes in funding preferences
Institutional funds and smart money are gathering in two directions:
Mainstream assets like Bitcoin, Ethereum (as basic allocations);
A few altcoin projects with solid fundamentals and clear narratives (as sources of excess returns).
Projects in the middle ground are being forgotten by funds.
3. What kind of altcoins still have opportunities?
After this round of reshuffling, I believe the following types of projects are worth continuous attention:
1. Established projects with high circulation ratios
Projects that have been online for more than two years, with a circulation ratio of over 80%, and where the team and VC chips have basically been released, often show stronger resilience in a bear market.
Because: the selling pressure has been fully released, holders are mostly long-term believers or deeply trapped, and the downward price space is limited.
2. Protocols with real cash flow and income
Don’t look at market cap, look at income.
In DeFi, infrastructure, public chains, and other tracks, some protocols generate considerable fee income daily.
These incomes can:
Used for buying back and destroying tokens;
Allocated to stakers;
Support the continuous development of the protocol.
Projects with cash flow are like oases with fresh water, surviving better in a bear market.
3. Projects that align with the direction of the next narrative
Every bull market has a core narrative:
2017 was for ICOs and public chains;
2020 was for DeFi and NFTs;
2024 will be for RWA and AI + blockchain.
Projects that have made substantial progress in the direction of the next narrative may become the next hotspots.
4. Suggestions for beginners' current operations
1. Adjust the position structure
My current allocation ratio:
Bitcoin + Ethereum: 60% (basic position, long-term holding);
Cash/USDT: 20% (waiting for extreme opportunities);
Altcoin portfolio: 20% (strictly selected, no more than 5 projects).
2. Replace "chasing new" with "archaeology"
Instead of chasing newly launched projects, it’s better to study deeply those:
Has been online for more than 2 years;
Has experienced a complete bull and bear cycle;
The team is still continuously building;
Old projects with real community discussions.
Finding the wrongfully killed pearls in the ruins is safer than finding the next star at a party.
3. Establish a strict screening checklist
Here is my checklist for assessing an altcoin project:
Is the circulation ratio >70%?
Has the development submission been active in the past 30 days?
Does the protocol income cover team expenses?
How is the quality of community discussions? (Is it mostly bots spamming?)
Are large transfers frequent? (Beware of teams or VCs continuously dumping)
Any item that does not meet the standards will be directly excluded.
5. Several judgments about the future
1. The market will not remain silent
Liquidity is the blood of the market, and global central bank monetary policies are the source of that blood. As the interest rate cut cycle begins, liquidity will eventually return.
The difference is: this time, liquidity will be more "picky".
2. There will be an altcoin season 2.0, but it will be different
If there is a general rise in altcoins in the future, it will be:
Structural (some sectors rise, most do not);
Supported by performance (projects with income rise, purely conceptual ones do not);
Shorter duration (rapid rotation, rather than long-term general rise).
3. Real opportunities belong to "prepared money"
At this stage, the most important thing is:
Keep sufficient cash (at least 20% recommended);
Deeply research a few projects you are optimistic about;
Wait for extreme panic in the market and lay out in batches.
When others panic sell, you need to have the courage and funds to take over the chips.
6. The final heartfelt words
I know it feels painful to watch your account shrink, and it’s anxious to see others getting rich.
But I want to tell you: the most profitable opportunities in this market often appear after most people have despairingly left.
If you feel confused now, I suggest:
Reduce trading frequency, increase learning time;
Shift from pursuing "quick doubling" to pursuing "not losing large sums";
Set clear disciplines for yourself and strictly enforce them.
That friend who suffered heavy losses on DAT recently started to calm down and study several old DeFi protocols.
He said: "Now I understand, investing is not about who runs fast, but who lives long."
If you're also looking for ways to navigate through bull and bear markets, feel free to follow.
I will continue to share:
How to assess the true fundamentals of a project
Position management strategies in different market environments
And how to maintain rational thinking in an emotional market
There is no shortcut to getting rich overnight here, only the practical experience of long-termism.
After all, in this unpredictable market—living clearly is more important than living lively.
Follow me, don’t get lost! Observe calmly and layout rationally. 🧭
