I have had enough experience in the crypto world to spot an abnormal situation and it is my feeling that the current altcoin market is getting me back to the past. The recent rally in altcoins those catching after eye price spikes across metals was the talk of the town. The “to the moon” memes are flying fast and furious, and retail traders are flocking to the sector, eager to grab a quick buck. But I am not convinced. Every bit of this boom looks like a classic liquidity trap, so I am recommending that anyone reading my story should be careful about their next step.
Let me explain it in detail. In my view, the first thing I do not feel like doing is not to probe the real promoters of this cause, but to ask the question who really is driving the bus. Markets do not move mysteriously. The sharp upward altcoin trend is not a virus of joy; it looks more like the result of a well planned off script play.
Larger players whales, institutions, or market makers frequently attempt to push prices higher in extensively leveraged markets so that strength seems to be the case. Essentially, it is a technique that has been with trading from its dawn: inflate the price, attract the masses, and secretly sell the shares while retail investors rush to buy. This plot is not new to me.
Really, this happened identically in 2017 and 2021 when altcoins exploded with incredible energy and FOMO took over, and then suddenly coins lost their value as the smart investors were cashing out. Contrary to some of the reports, this isn’t the beginning of a wonderful “altseason.” It’s the phase of distribution, where the risk is being handed over from the big players to the rest of the market.
It may seem that the charts are bullish; however, the actual things happening are telling you to be careful. Why am I worried? First of all, the volume doesn’t agree with the price action. Real bulls runs are characterized by the involvement of a lot of people regular, natural buying all around land. At this point, the volumes seem to be popping in a way that is not genuine, as if they are being sustained to keep the story alive.
Besides, leverage is a glaring red flag as well. The crypto market is a heavily leveraged market, and when the price is going up this fast, it is a sign that most of it is borrowed money. In this way, volatility is inevitable, and it won’t be the “good” kind. If anything goes wrong like a liquidation cascade or a bad news cycle this house of cards will fall apart.
I do not contend with the possibility of profits. Short term traders who use strict risk management can ride these waves and wind up in a winning position. Nevertheless, the average investor would be better off not chasing his way into the rally as this would be tantamount to running into a burning building because you smell barbecue. The profits may be tempting; however, the danger zone is extremely high.
What I usually do is: I just sit back and relax while I am holding on to my safety. When I do trade, it is with very strict stop losses and a definite exit strategy. No heroics or YOLO betting. The market is loud and it is easy to get carried away with the thrill. However, following my experience, I have to say that discipline always triumphs over emotions.
This altcoin rally might appear as if everybody is having a good time, but I am definitely not one of the party people. Remain vigilant, regulate your risk, and don’t allow the hype to affect your logic. The market is always ready to lower the pride of the overly confident ones.
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