What cryptocurrency should be avoided

A leading market expert Willie Woo in his analysis compare altcoins with radioactive substances. According to him, their lifespan is limited, and is measurable. If you draw a curve of the price of most of the coins on the chart, it will be a straight line. Furthermore, from the investor’s point of view, altcoins can be divided into two categories: oscillators and degeneratory.

The oscillator is the system that produces oscillations, and its performance is periodically repeated in time. Degenerator — the opposite of the generator, that produces nothing and is destroyed.

Classification altcoins

So, in General, all violas, according to Wu, are divided into four groups:

  • the Protocol of the coin;
  • Utility-tokens (those used to access the product or service);
  • Security tokens (financial instruments for profit due to the growth of the asset price);
  • unique tokens.

From the perspective of the investor only two categories: oscillators and degeneratory. If the first still have a market value, then the second is almost completely deprived or will be deprived in the future.

The price chart of a typical regenerator can be simplified to a straight line that goes down. Here, for example, a logarithmic graph of Namecoin coin. Courses most altcoins are moving in a similar manner.

Namecoin Graph. Source: Twitter

To learn the oscillator is quite simple: on a global scale on the chart of this coin should be easily defined bull and bear cycles lasting about four years. In the vast majority of cases they coincide with the corresponding cycles on the chart of Bitcoin and look so. Examples of oscillators are Litecoin, Dogecoin and Stellar.

Chart Litecoin (blue), Stellar (red) and Dogecoin (green). Source: Twitter

The more cycles can be seen on the living life Aldona, the better.

As an example of the oscillator Wu led chart Dogecoin. As you can see, it is clearly seen periods of sharp UPS and downs in price.

Source: Twitter

Furthermore, Dogecoin is exposed to the Lindy effect. According to this hypothesis, the expected lifetime of the technology or ideas is proportional to their current age.

Simply put, the coin has existed for quite a long time and has earned the gratitude of investors, so the chances of its complete collapse is reduced with each new day.

It turns out that innovation is not what is needed for investors. The activity of developers is not always combined with a price increase. Much greater role played by the liquidity of the coin, that is, the more exchanges support trade pairs with Aldona, the more economic value it has.

In the end, Wu was recommended to be wary of the coins, which just completed its first bullish cycle. They are likely to be the most degeneratorov that will destroy your investment capital.

In other words, you should avoid the cryptocurrency that has not experienced at least one full cycle (bull + bear), and does not respond to changes in the exchange rate of Bitcoin and are only down. To holdit last — that is, keep and hope for miraculous growth makes no sense. These cryptocurrencies will only decline in value and affect your investment results. Willie Wu recommends you to get rid of them and forget.

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