Bull and Bear Market Transitions: From 40x Gains to Losses—What Lessons Did I Learn in This Cycle?
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Bull and Bear Market Transitions: From 40x Gains to Losses—What Lessons Did I Learn in This Cycle?
How to track projects? How to spot the top ones?
Navigating Web3 tides with focused insightsWritten by: Mainomenos
Translated by: TechFlow intern
Amid the chants of "go to the moon," my portfolio surged from $30,000 to $1.2 million—only for my "spaceship" to explode mid-journey, crashing down to just $18,000.
The DeFi Summer kicked off in 2020 with the launch of Uniswap V2. A novel idea, low slippage—but ultimately, a decentralized casino. Meme coins and shitcoins launched daily, and everyone believed they could become the next millionaire. As @gcrclassic once said, humans have long been desperate, greedy, corrupt, and lonely.
Shortly after,
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They issued tokens, distributed airdrops, and offered token incentives (for liquidity providers).
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Soon, more similar projects emerged—Sushiswap, 1inch, Pancakeswap. These were all tactics to lure users into shifting their trading activity elsewhere.
What I learned,
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Try new technologies (here, new DEXs and LPs)
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Derivatives built on new technologies will succeed
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If you enter early enough, participate in liquidity staking incentives. If you realize you're not early—and know you likely missed it—immediately walk away from the rewards
The timeline moves forward. The cost of playing with crap coins became prohibitively high due to sky-high gas fees that left investors frustrated. How could people keep playing? A new solution had to emerge. Binance Smart Chain appeared in the fall of 2020, allowing users to play the same game on another chain. Attention then shifted to other public blockchains—Avalanche, Fantom, Solana.
What I learned,
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Try new technologies (here, public chains and cross-chain bridges)
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Do hard things to enter ecosystems early. Joining Avalanche in January 2020 was difficult—you had to navigate the X/C chain complexities. But those who joined then were truly early. I bought Avalanche between $4 and $14 and provided liquidity in the first DEX on its chain. If you arrive early, wait for others to follow.
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Follow the money. Blockchains rich in smart contracts often offer massive incentive programs to developers, encouraging them to build there—and attracting even more developers.
Next, I hit my first 50x return. I started hunting for projects myself. For example, I'd watch a major KOL, see what projects he liked, go one level deeper, and check what those people were backing. That’s exactly how I discovered a token with very few holders and a promising developer behind it. When I saw @veC0zy tweeting emoji and images related to the project, I bought in and confirmed my expectations.
What I learned,
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Watch the big players—see what they’re watching
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Once you hit a 10x gain, start selling at least a portion of your position. Cashing out three years’ worth of salary is never a bad idea.
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There will be many, many, many tokens that deliver 10x or more—you don’t need to rely on just one.
Not long after, I found a major project led by Dani. Dani does many things well, but excels most at 1) being a salesman and 2) building communities. Finding someone with both traits is rare. When newcomers flood into crypto, he has strong influence—and he champions community engagement.
What I learned,
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Identify "salesmen" early, and double down on the projects they like before they pump
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Find the person with the strongest consensus on crypto Twitter—but don’t trust them for too long
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Track the growth of these accounts and community sentiment across Twitter, Discord, and Telegram.
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Be cautious when innovators are overly idolized (newbies might dump their life savings into their projects)
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The arrival of ordinary people doesn’t mean a supercycle—it may signal the end is near
Summary:
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Don't fall in love with projects.
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When you earn life-changing money, stop and actually change your life.
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Ponzi schemes exist—look closely at what you're investing in. If the APY/rewards seem too good to be true, it will collapse.
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Non-original ideas can still make money—just don’t get greedy.
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Once a project or person is tainted by scandal, that stain lasts. Sell immediately when this happens. Only buy back in the rare case that the project successfully resolves the issue.
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Pay attention to the macro environment—don’t blindly buy during economic tightening.
Typically, spotting the top comes too late. The following signs are generally observable—but some may only be visible to you personally:
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Multiple friends (non-crypto) simultaneously ask you about crypto
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Crypto Twitter is flooded with posts about quitting jobs
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You’re bragging about your gains
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You believe your life has fundamentally changed
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Politicians begin paying attention
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Your family tells you to sell
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Scams are everywhere
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Physical Dogecoin ads appear in major cities (mainly in the U.S.)
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Exaggerated trends
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