Cryptocurrency Investment J-Curve Principle: Achieving Maximum Returns When Enthusiasm Wanes

Original Title: 《The Crypto J-Curve》

Author: IT4I ᵍᵐ

Compiled by: 深潮 TechFlow

The cryptocurrency J-Curve may be one of the most important methods for us market traders to learn.

If you are not an experienced sniper who prefers to buy cryptocurrencies only in safe situations, or if you are just an emotional trader trying to make sense of things, then this short article is for you.

Phase One

The main participants are snipers with technical advantages, insiders/pre-sellers with unfair advantages, and speculators who focus on quantity over fundamentals.

In most cases, ordinary traders fail here, as the decline happens as quickly as the rise when speculators turn to the next shiny thing.

Phase Two

Enthusiasm wanes, speculators exit, trading volume shrinks, and the average uPNL of holders falls below profit, while Indians storm TG with marketing suggestions, and KOL scammers slowly fade from TL.

This is the most critical phase because it presents the greatest opportunities.

Phase Two is the "cat turns tiger" phase, and to achieve this, it is necessary to assess whether the project is dead or if the sacred J-Curve is loading.

Important Indicators to Watch

Team Wallet:

• Is there a bundle sale?
• Are top wallets selling?
• Are taxes (if any) being transferred to Cex or retained/used on-chain?

Social Image:

• Is the handling on Weibo/Tg cautious and consistent?
• Are social metrics increasing or decreasing?

Execution of the Roadmap:

• Are the commitments mentioned by the team in Phase One being fulfilled?

New Buyers:

• Are well-known wallets buying?
• Are new wallets buying?
• Are dormant wallets buying?

There are many other indicators, but I believe these are the most important metrics to assess potential second-phase buying risks/returns.

In the past few months, there have been countless examples of the J-Curve, and here are some examples I lazily collected;

Phase Three

The product begins to show results; in terms of practicality -- the actual use of technology generates real income, and for memes -- the followers are grand, and KOLs are promoting vigorously.

This is where you sell, as the risks are high, and you should ensure profits, focusing on the second phase of the J-Curve.

In summary, studying the J-Curve can provide opportunities for those without any advantages (most of my purchases in Phase 2 were made through Uniswap with lower gas fees).

Hunting in Phase 2 can help us combat FOMO and avoid becoming the bag holders when snipers and big players sell off.

Hope you learned something new, goodbye.