Ok, the idea is this – you go to your favourite major crypto exchange and sort by highest marketcap and then you scroll down the list until you spot one cryptocurrency (less the stablecoins) that didn’t pump significantly and you buy into that. You will of course need to do this strategy during the major bull run or you will most likely get burnt. First of all I didn’t “discover” this strategy. Saw a few Youtubers talking about it the other day and found it kind of interesting. And no of course I am not endorsing such an “investment” strategy. But I am rather curious whether this will actually work. The intent of this strategy is to go down the list of the big marketcap altcoins and to only buy in those which hadn’t still pump for the current run. Because as you know for cryptocurrencies and in most cases, when BTC pumps, the rest of the altcoins will follow especially in a bull market.
The reason why you do need to start from the highest marketcap is because these are usually the safest and they are the ones usually following the market trend. And when investors and traders take profit, they will either pump it back to Bitcoin or they will do this strat of finding an altcoin which didn’t had it chance to shine yet. Apparently investors will think something is “underpriced” if it didn’t yet pump for the current run. The cycle then goes on until the major bull run fizzles off. Not too sure whether this actually makes sense to you guys but that is how it actually goes. There are some Youtubers deploying such strategy to make money in the short run. Of course this will not always work. This is seriously depending that the bull run is still occurring and they will stop at the top. But how do they spot the top? They might seem that they are making some profits for the time being. However if they timed it wrong and the markets goes south when they bought the top, they will lose money as well. That is exactly what happened during the previous May run. I have seen the same group of Youtubers getting rekted on their stream. So if you are aiming to deploy such a strategy, you should only do this for the short term and I would highly recommend you to only use a portion of your portfolio for this. This is one which I would consider rather risky. Yes I have seen it working for some traders. But whether it works well? That seriously depends on timing.
I am starting to believe that some people do this strategy because it is actually pretty easy to understand. There is not much technical analysis needed either. And you don’t need to really understand too much about the token or coin you are planning to invest in as well. You just need some decent scrolling skill, quick look at the daily increase and then at the charts if something caught your eye and you can start “making money”. And I guess there is the thrill factor as well. But again I would not recommend anyone doing this. Especially if you are a small time investor. Stick to dollar cost averaging or hold on to your coins for the long term. Oh by the way I am no financial advisor. So always do your own research when it comes to investing.