Miles Deutscher – We Need To Talk About Altcoins.. [It’s Worse Than I Thought] (18.06.2024 Summary)

Miles Deutscher – We Need To Talk About Altcoins.. [It’s Worse Than I Thought] (18.06.2024 Summary)

Miles begins is highlighting the severe crash in the altcoin market over the past week. Many of the biggest altcoins have plummeted 20-50% in what he calls a “complete altcoin wipeout.” He aims to discuss the reasons behind this crash and provide guidance for investors on how to navigate this turbulent market.

Bitcoin’s Outperformance

  • One key factor driving the altcoin crash is Bitcoin’s relative outperformance. While Bitcoin has seen a relatively small drop of around 11%, many altcoins have retraced their entire yearly gains, down 20-50%. Miles explains that this discrepancy between Bitcoin and altcoin performance is immense, and it’s one of the main reasons for the altcoin bleeding.

Lack of New Liquidity

  • Miles cites the lack of new liquidity entering the crypto market as a major reason for the altcoin crash. With over 1 million new crypto tokens launching, including many meme coins and high-valuation VC coins, existing liquidity is being spread thin. This dilution, combined with stagnant growth in stablecoin supply (an indicator of new money entering crypto), has created an environment where altcoins are struggling to perform well.

The Need for a Bitcoin Pump

  • According to Miles, the number one thing that can save altcoins is a Bitcoin pump to new all-time highs, which could generate mainstream interest and lift the entire market. He also mentions the potential positive impact of the upcoming Ethereum ETF on altcoin performance.

Buying Strategy During Capitulation

  • Miles advises against trying to catch a falling knife by averaging down into altcoins during a slow bleed. Instead, he recommends taking advantage of major capitulation events and liquidation cascades, which often present the best risk-reward opportunities for entering the market. He shares his approach of buying high-conviction tokens during these capitulation weeks while preserving capital during choppy periods.

Overall, Miles provides a realistic assessment of the current altcoin market conditions and offers practical strategies for navigating this challenging environment, emphasizing patience, capital preservation, and seizing opportunities during extreme market events.