Today, I analyzed some narratives with my friends, summarized some thoughts, and would like to share them for discussion:
The difference between a good narrative and a bad narrative is the timeliness and intensity of attention capture. A good narrative can continuously capture significant attention, with two core elements: sustainability and magnitude.
How do we discover or even predict or create good narratives in advance? The key is to observe what can attract attention from both inside and outside the circle over the long term. This requires a strong curiosity about the world, as well as continuous observation, practice, summarization, and reflection.
From the perspective of technological innovation, AI is undoubtedly a good narrative. There is nothing that attracts market funding attention more than AI, and as AI technology develops, the attraction of attention and funds will become greater and more sustained.
Currently, the biggest event in the circle is the stablecoin legislation. With the introduction of the legislation, more countries and institutions will get involved in the stablecoin war, and the application of stablecoins for payments will be fully implemented. I believe that for a long time in the future, we will be discussing various stablecoins and their applications. Therefore, stablecoin-related projects are bound to emerge, along with significant memes.
Golden Retriever and Old Horse often create major narratives, but it is important to note that much of the attention they generate is very short-lived. If you find that a narrative they created has strong sustainability, then it is a good narrative.
A common mistake when only focusing on narratives is: you correctly identified a narrative but entered a weak position, struggled for a long time, and ultimately got countered by a strong position. This is a typical case of only looking at the surface and falling for FOMO, leading to entering the wrong situation and misplacing genuine intentions. Therefore, do not blindly trust narratives; you must also study the situation of the positions.
The quality of market liquidity will determine the market cap ceiling of narratives and affect the candlestick charts. Therefore, during times of poor liquidity, lying flat is actually a good strategy. If you really can't stay idle, small-scale trial and error, and exiting after a quick trade might be a safer strategy.
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