Narratives in cryptoNarratives its not a trend.
The first investors who track and find the narrative and start buying tokens in this sector will make a good money, if theyll out in a right time.
In the previous bull market, it was not difficult to see the DeFi narrative. Users wanted to see decentralization in everything: exchanges, stablecoins, wallets, landing pages, etc. Later, the narrative was born on exchanges with leverages such as DYDX, GMX, GNS and many others. Who paid attention to this narrative - made good money buying tokens or received a generous airdrops.
On this Market you need always follow trends in order to better understand what is happening now around in this space. sometimes people can believe that Bitcoin halving will lead to price increases every four years - these and other narratives are used by many investors to predict price movements, but these are not some rules or laws in crypto! And often as we can see now old patterns and narratives stop working) The market is dynamic, you cannot perceive the market according to the old patterns of 2020, the world is changing.
Defi in 2020, nft, layer1, The narratives are around Doge Coin and Elon Mask, shiba inu, Metaverse and Fb. Mana and sandbox grew in a few days, it is always important not the event itself and the sentiment around it, and it is important to enter and exit on time. Narrative AI, some tokens played back and showed new highs, and some were just speculation in this sector. Here's an important thing to note: ALWAYS have a fixation plan. Most narratives will eventually fail and the price of their tokens will bottom out.
The best way to sense an emerging narrative is to practice critical thinking.
Whenever you read any important news, even if it is not related to cryptocurrencies - think about whether it could potentially be related to cryptocurrencies. If so, with which coins or projects?
Conventionally, a year ago no one was talking about RWA, now everyone has become like an expert in this sector. The same will happen with the DePin sector, I think SocialFI will be one of the key ones in the future, because we all use social networks. Why do narratives and catalysts matter in project evaluation?
Just because a project is good doesn't mean it's the right time to invest.
Fundamental analysis can help you determine which projects have the foundation for success, but narratives determine WHEN their prices will rise.
Keeping track of narratives in a crypto can be a challenge because they can change very quickly.
People are getting too obsessed with fundamental analysis. Asset prices only go up when other people buy them. Narratives + catalysts can drive people to buy.
The project may be fundamentally good, but you may see downward or sideways price movement until there is a catalyst and narrative to drive growth.
A great example of elastos, where fundamentally the project looks so cool, but has been in a downtrend for 5 years. And only now is some growth starting on the layer2 narrative for Bitcoin
Find narratives and catalysts early by exploring social media platforms like Twitter and even niche media.
Look at the key events coming up and then ask yourself, "What are the potential implications of these key events for the crypto market?".
For example, at the moment, as I already said, it will be the RWA sector globally, that is, the tokenization of everything in the world. This is not a short-term narrative, but a long-term one.
Short-term that will be tied to a sports event, Euro 2024 is a narrative of fan tokens, CHZ token and nft related around this topic, or even meme tokens.
How to evaluate a narrative?
- Can it be useful in the real world to suppress demand?
- Can it affect a large number of people, or will it be a local group of people?
- What is the current macro sentiment in the market, and the mood in social networks. After all, if the narrative takes place in a bear market, it will be very difficult to make a big profit from it.
Then once you've identified potential narratives, you can look at the categories, and directly the tokens within those categories and their roadmaps. Take into account when forming your investment decisions
- Analyze sentiment on Twitter, Reddit. This is where the main mood of the crowd is formed, follow the trends on Twitter, but remember that narratives can play both in a positive and negative way.
- The main world media very often form a specially wrong opinion about the market, because essentially all the key media are controlled by big players, and since the coverage of users in them is large, they can set the vector for discussions. If all the mainstream media say that the RWA sector is just a bubble, a lot of people will actually believe it now)
Narratives can emerge from portfolio analysis of public funds. But remember, funds can accumulate certain coins from a certain sector and anonymously a lot, but add some tokens to the portfolio on which they do not make a big bet, and you can go to all in.
- Always analyze your media field with critical thinking. Analyze the information from the point of view of who and why start talk about this exactly now!?
- Work with proper risks and invest according to your strategy
- Do not invest in all sectors, choose a few of the most promising for you, and several tokens in each sector
- Always filter who you read on social networks. millionaire influencers very often made capital not with trading)
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✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
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