Prepare for the山寨 season: spend time identifying the right projects and adopt a "dollar-cost averaging" approach to gradually realize profits
TechFlow Selected TechFlow Selected
Prepare for the山寨 season: spend time identifying the right projects and adopt a "dollar-cost averaging" approach to gradually realize profits
Taking profits when BTC or your altcoin reaches certain price levels can also be an effective strategy.
Navigating Web3 tides with focused insightsAuthor: THE DEFI INVESTOR
Compiled by: TechFlow
Many people have recently lost confidence in the continuation of this bull market cycle.
Their disappointment is understandable, considering that many top altcoins have dropped more than 60% over the past few months. Surviving such a market downturn is indeed challenging.
However, there are numerous signs indicating that this cycle isn't over yet.
Of course, nothing in financial markets is certain. But I do believe that at this point, the risk/reward for being bullish is very attractive.
In this article, I’ll explain why I expect an altcoin season later this year and outline my current strategy to maximize profits during the next rapid price surge.
Let’s dive in.
There are many reasons, but in short, the main ones are:
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Stock markets are at all-time highs
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The Federal Reserve is expected to cut interest rates later this year
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Total stablecoin supply continues to rise
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Major U.S. presidential candidates now support cryptocurrencies
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Traditional financial institutions (e.g., BlackRock) are starting to pay attention to crypto
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Approximately $16 billion in cash will be distributed to FTX creditors in the coming months—many of whom may reinvest those funds back into the market
Q3 has historically been the weakest quarter for cryptocurrency performance, which may explain the recent decline.
Source: CoinGlass
However, I am very optimistic about Q4.
With the U.S. election, anticipated Fed rate cuts, and the FTX cash redemption plan all occurring in Q4, it's hard for me to imagine that BTC has already peaked.
So far in this cycle, BTC dominance has been rising. Altcoin seasons typically begin when this trend reverses—and I believe that reversal could happen in Q4.
Betting on the Right Projects
Now that I’ve shared my bullish outlook, I’d also like to discuss my strategy for identifying tokens likely to outperform in the next market phase.
A good way to become a better investor is to study past market cycles.
For example, I think the best way to learn how to spot 10x potential tokens is to first analyze common traits among tokens that have already achieved 10x or greater returns.
In the previous bull run, these five tokens delivered returns exceeding 100x:
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SOL - Solana’s token, one of the most popular non-EVM blockchains.
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LUNA - Terra Luna’s token, from the algorithmic stablecoin experiment that ultimately failed.
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MATIC - Polygon’s token, one of the most popular Ethereum L2 solutions.
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SPELL - Token of Abracadabra.money, a DeFi lending platform enabling high-yield degen strategies.
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FTM - Fantom’s token, one of the fastest-growing blockchain ecosystems during its 2021 hype phase.
I believe their massive success can be attributed to several key factors:
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Charismatic leaders - Do Kwon was the figurehead behind LUNA. Andre Cronje led FTM. Daniele Sesta drove SPELL.
All three were charismatic and successfully built strong communities around their projects. A founder with strong media presence and compelling personality can significantly boost a project’s visibility and adoption.
Retail investors love backing projects with strong leader figures.
Most leader-driven projects underperform long-term, but by betting on them before the bull market ends, you can make substantial gains.
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Innovative products
You don’t need another Uniswap fork.
Your best opportunities lie in innovative projects that push boundaries rather than simply copying competitors.
This doesn’t mean they must build something entirely new.
But ideally, you want to bet on a project building a product that’s 10x better than competitors and shipping faster.
A great example that comes to mind is Pendle.
Pendle was the first yield-trading protocol to enable trading of airdrop points, benefiting greatly from being first to market.
Moreover, its team consistently announces integrations with trending protocols, helping Pendle maintain its position as the leading yield-trading protocol.
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Partnerships with web2 and/or web3 giants
Retail investors love seeing their favorite projects announce partnerships with major web3 protocols or highly popular web2 companies.
Polygon, Solana, and Terra Luna gained massive attention through such collaborations.
Partnership announcements can trigger significant token rallies during bull markets.
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Meaningful token utility and low token issuance
SOL, MATIC, FTM, and LUNA were all used for paying gas fees and securing their networks, while SPELL had a revenue-sharing model.
Simple governance tokens like UNI also performed well in the first half of the 2021 bull run.
However, I believe most outperformers this cycle will offer more than just governance—they’ll include additional utilities.
Some potential token use cases include:
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Fee discounts
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Revenue sharing
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Paying network fees
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Buyback and burn mechanisms
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Rewards for protocol users
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Access to exclusive products (e.g., web3 launchpads)
Memecoins are clearly the exception—they can perform extremely well even without any utility. But aside from memecoins, I generally avoid tokens lacking real utility.
Unlock schedules also matter. You don’t want to buy a token whose circulating supply will increase by over 300% within the next 365 days.
Major token unlocks can significantly impact price—this has happened many times already this year. Tools like Token Unlocks help monitor upcoming unlocks and vesting schedules across 100+ tokens.
It's a positive sign when a large portion of the total token supply is already in circulation.
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Upcoming major catalysts
Examples of potential catalysts that could positively impact token prices:
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A major protocol upgrade
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Tokenomics upgrade
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Listing on a major CEX
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Launch of a new product
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Funding announcement
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Major partnership announcement
Catalysts can dramatically boost a token’s price performance—that’s why I usually only invest in projects with significant catalysts on the horizon.
I always ask myself one question:
Why would someone buy the same token from me at a higher price?
If I can’t find at least one strong reason, I stop buying that token. High-conviction bets are the ones that truly make you rich.
My plan this cycle is to hold up to 10 tokens that meet the above criteria. If you know what you’re doing, over-diversification isn’t worth it.
Airdrops: Are They Still Worth It?
Recently, many people have been disappointed by hyped-up airdrops.
LayerZero is a recent example. As airdrop farming has grown in popularity over the past few years, many airdrop opportunities are now heavily diluted, especially due to farming bots.
As a result, most airdrops today follow linear distribution models instead of tier-based systems (like Jito), to avoid rewarding industrial farmers.
Are linear-distribution airdrops bad?
The issue is that whales benefit the most from linear distributions, which isn’t favorable for low-capital users.
Turning $1,000 into $50,000 via airdrop farming is nearly impossible now. But I still believe you can make solid profits by farming the right airdrops.
My key criteria for evaluating tokenless protocols are:
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Strong community - The more active the project’s community is on X, the higher the potential token valuation
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Raised funds from VCs - The more funding raised, the higher the initial token valuation is likely to be
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Low TVL / total funding ratio compared to other tokenless projects - Lower is better, as a high ratio may indicate excessive farming
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Polymarket is a good example of a protocol with an excellent TVL / total funding ratio.
Ideally, farm airdrops from protocols people actually find useful—not just those used solely for farming.
What About Taking Profits?
Every bull market creates a new generation of millionaires.
Yet data shows that over 90% end up giving most of their profits back to the market due to greed. That’s why you need a realistic exit plan.
For long-term holdings, I primarily take profits based on fundamental triggers.
Whenever I start seeing multiple signals that previously indicated market tops, I begin using a reverse DCA strategy to sell.
Reverse DCA is the opposite of dollar-cost averaging—it involves selling a fixed amount of tokens at regular intervals.
Some key top signals I watch for:
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Jim Cramer constantly promoting crypto
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Coinbase becomes the #1 app on the App Store
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Your friends and family start talking about crypto
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Several celebrities launch their own tokens
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People flex Rolexes and luxury cars on your X timeline
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Useless projects raise tens of millions in funding
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Finance YouTubers frequently discuss crypto
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Google search volume for “crypto” spikes to new highs
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Ponzi farms offering five-digit APY rewards attract billions in TVL
The only top signal we’ve seen so far this cycle is celebrities launching memecoins. This makes me think we’re still in the early stages.
Taking profits when BTC or your altcoins reach certain price levels can also be effective. But in my view, identifying actual price levels suitable for selling is much harder.
Final Thoughts
I always try to stay realistic, so here’s my take:
Success in this bull market may be harder than in previous cycles. One reason is the explosive growth in the number of crypto tokens.
Source: Miles Deutscher
Finding good investments is becoming increasingly complex.
Additionally, price discovery for many new high-FDV tokens now happens in private VC markets. With most new tokens launching at inflated valuations, it’s difficult for retail investors to find tokens capable of 20x or 50x returns.
This doesn’t mean there are no opportunities left in crypto.
But you’ll need to put in more effort and time to identify them. And if you’re willing to do that, chances are you won’t regret it.
That’s all for now—thanks for reading!
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The DeFi Investor
