Altcoin Markets follow the same principles as larger stock markets: It’s all about supply and demand. Think of a wedding service in the summer. If it was publicly traded, the stock would increase in price every summer as traders tried to take advantage of the increased summer dividends. As companies do better, like wedding services in the summer, their stock is more profitable because it pays a higher dividend.
Altcoins do the same thing
When demand for the “product,” (chosen coin) is low, the price is low. When the demand is high, it usually coincides with a decrease in overall supply. This pushes the price up.
The dynamic happens again and again across all markets in the world, we’re just here to take advantage of those that aren’t knowledgeable of these trends, and buy when their “trading indicators” are pointing up.
Those indicators are easily manipulatable. The reason that they’re pointing up is because the accumulation phase has ended and those that are making real money have begun to sell to those that get excited by large volumes and big green numbers.
Distinguish for yourself the difference between buying during an accumulation phase (similar to wholesale prices), and buying during a distribution phase (marked up, hyped up, name-brand prices).
Short-term price movement means nothing in these markets. It’s costs fractions of the potential profit to fake volume and price movement. One good trade can net 10-30 BTC. If this is invested into faking volume for another coin, suddenly there can be daily volume in the hundreds of bitcoins, shooting the coin to the front page of exchanges. Getting excited about that is the exact kind of attitude that loses people money.
Whales spend months shaking the “weak hands” loose. These are people that invested more than they could bear to lose over time, people that bought at the high and are holding on for the next pump, and those that buy and sell tiny fractions of a bitcoin’s worth of altcoins hoping that it eventually becomes something substantial. (Hint: it won’t).
Always buy when everyone else is selling. Always sell when everyone else is buying. This is the ultimate winning strategy.
Remember: if you follow the general rules of supply and demand, you will always win. That’s why the altcoin markets are run by those who think logically, not emotionally.