What are you looking at when buying coins? How to evaluate whether a coin price is reasonable? In the traditional stock market, a company's annual report performance and subject matter will have a significant impact on its price, including ROI and P/E. The cryptocurrency market is still in its early stages, with 99% of project coin prices having no relation to the product itself, and the product does not require any value. Meme has created countless myths of sudden wealth, and the so-called "value investors" of the ETH world computer in this cycle have also been severely affected. Everyone is confused and helpless. The previous sector rotation and the information path dependence of ETH/BTC's rise and fall linkage are not effective in this round. Returning to the title, most people buy coins based on news media, conveying positive and negative judgments through information. Of course, having one's own judgment has already defeated most people in the market. Most people rely on someone or some inexplicable reason to buy coins. That is to say, the so-called 'gossip' is completely irresponsible for one's own money. My gradually established understanding is that prices are influenced by supply and demand, who is buying and who is selling, but we are still insignificant particles in the vast ocean. In this cycle, three types of coins have emerged: VC coins (with venture capital background and financing), meme coins (community autonomous cto), and application coins (exchange platform coins, and new flat Taiwanese dollars) one ⃣ Market value in circulation (MC)=circulating chips x market accepted price Let's first distinguish between two concepts. The circulating market value refers to the current market value. Another factor is the total market value of FDV, which corresponds to the overall valuation. The total market value (FDV)=total chips x market accepted price In the previous article, we talked about the calculation of coin circle projects based on ecological leaders. Projects that issue coins early and survive become leaders, which creates market accepted prices. Why has the pricing decreased in this cycle? The main players with pricing power are VCs and exchanges. Previously, VC had more money and fewer good projects, so the project team may not initially want to raise so much money, and VC was eager to give away the money. So they pushed up the valuation, such as ENA and scroll. The exchange will provide pricing recommendations for the project, but if it is in a small exchange with few circulating chips and low liquidity, theoretically unlimited pricing can be achieved. Therefore, for IP without UPbit or Binance spot, it can reach 5B. This round of VC shutdown has resulted in fewer and fewer transactions, with a tendency to go out and do projects on their own, which has affected the current pricing of tokens. The part of circulating chips is a question for universities, and I can write an article to share how I estimate chips. Nowadays, information is becoming more and more transparent, and project unlocking information can be found. On chain addresses are also made public. In fact, many project parties design token economics systems to determine whether they want to do something or make a market. two ⃣ Narrative decides how big a "tolerable foam" is In the traditional stock market, a company's annual report performance and subject matter will have a significant impact on its price. But the cryptocurrency industry has no performance, it's a narrative of rounds. Recently, PENGU, which has gone viral, has increased fourfold in a month, reaching a market value of 3.5B. All first tier exchanges have completed spot trading, indicating a real influx of funds. Why can the story continue to be told -In the early stage of selling pressure and digestion, the community is strong, and the web2 IP is constantly expanding. There are physical products sold in the mall, and there is cash flow. -The founder has strong resources and can make top tier project teams switch to Pengu avatars and super advertising spaces. -Animation is popular on overseas social media platforms, making retail investors who cannot understand dare to buy it; More money from home investment (special channel news) Remember that the cryptocurrency industry does not speculate on profits, but on directions that may be taken over in the future three ⃣ Shipping pressure vs. market relay capability In the previous section, Pengu analyzed the shipping and receiving capabilities. This indicates that you have roughly understood. Short selling PENGU/LAYER is a "logical pair", but "the value of the project is not just about" pulling the market ", but whether it can guide subsequent buyers to catch the chips. It's not a matter of whether the coin price is high or not, but a question of whether there is a 'person taking the last stick'. As retail investors, we need to abandon the preconception of 'how the market should go' and observe 'how they plan to harvest'. For example, as I mentioned earlier, there were no retail investors lured into entering the market, and the project team had sufficient funds, so they could continue to pull the market and reach 3.3B (which fell four times in the following half month) The price operation logic of the cryptocurrency circle, to put it simply, is mostly detached from fundamentals. It does not have clear cash flow and profit models like stocks, nor can it be explained by supply and demand+geography+cycles like macro commodities. Instead, it's more like a 'narrative maze driven by funds'. Speaking of the end, it is important to think clearly about the reason for buying coins, how long you can take them, and when to stop loss and take profit. Don't act impulsively! The price of the currency will not rise or fall indefinitely, benchmarking against leading and listed exchanges. The more liquidity there is, the better. What type of token does it belong to: defi, exchange coin, public chain coin Long Er's market value is difficult to surpass Long Yi's.