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The traditional alts market can be divided into two main categories, each with its own characteristics:
The first category is trend-based alts, where the price movements of these digital assets show strong persistence. They typically undergo multiple price adjustments, creating several entry opportunities for investors. This type of coin is suitable for investment using trend-following strategies, as the price increases are relatively stable and have a higher predictability.
The second type is explosive altcoins, characterized by rapid surges in a very short period of time. These assets have extreme volatility, with very few adjustments along the way, making it almost impossible to participate midway; investors can only chase the price up when it breaks through key levels.
From actual case studies, UNI, AAVE, and LTC can be classified as typical trend-type tokens, with relatively smooth price movements and a certain level of sustainability. In contrast, BCH clearly exhibits explosive characteristics, with more volatile and concentrated price fluctuations.
Understanding the characteristics of these different types of alts is crucial for developing suitable investment strategies. Trend-based alts are suitable for gradual investment, while explosive alts require more agile market responsiveness and more precise timing.