If you have spent time on the cryptocurrency Twitter (X) over the years, you probably know a trader with the pen name “GCR” (short for “Gigantic-Cassocked-Rebirth”). GCR was a regular on FTX's top traders list before the exchange collapsed. He brought 2021 crypto leaders to a tee and secured more than $6 million in the bank by shorting Terra Luna's crash. This trading legend is also known for tweeting wisdom about cryptocurrencies. Here we will introduce three of them. And what they can tell you about your own strategy.
1. When to take risks with altcoins (and when not to).
GCR famously acquired Solana (SOL) for $10 in early 2023, at a time when the panic in the crypto market was at its peak. His philosophy regarding volatile altcoins is to take more risk when the market starts to turn a corner. You can then gradually protect your capital over time as sentiment towards cryptocurrencies grows. This is the opposite of what most investors do. They play it safe at first and buy more tokens as the price rises.
A post from GCR's X account about when to take risks with altcoins.
Well, it's never easy to know that when The market is starting to change, but a little technical analysis can help you stay ahead of the curve.you'll want to look for it bullish divergence between the price of a token and its relative strength index (RSI). Daily RSI is the average gain on “up days” divided by the average loss on “down days” over the past 14 days. With some additional calculations, you get an RSI number that ranges from 0 to 100. If the price is making a low (i.e. still in a downtrend) but the RSI is making a low, it is a bullish divergence. This means that the power of buyers is increasing over sellers.
Below is an example of a recent bullish divergence in Solana (SOL, yellow) after this month's crypto sell-off. It doesn't guarantee we're in the lows, but it does indicate (according to the indicators) that the selling pressure is weaker than the buying pressure.
An example of a bullish divergence between Solana price (yellow) and the Relative Strength Index (RSI, blue). TradingView charts.
2. When to “sell the news” (and when not to sell it).
Major news events can have a significant impact on cryptocurrency prices. But in many cases, investors “buy the rumors” and the price increases as the event approaches. Then, when the event actually occurs, they sell their positions and make a sizable profit. Buying rumors and selling news is a good thing, especially if you are a short-term trader. But in some cases, selling news can be expensive in the long run. Prices may continue to rise after the initial drop, forcing repurchases at higher levels. GCR cautioned that when most traders are expecting a selling event, it is probably best to remain invested.
Posts from GCR's X account regarding Sell the News transactions.
Here is an example. Back in January, the U.S. Securities and Exchange Commission (SEC) approved nine spot Bitcoin ETFs. Now, Bitcoin had its first 20% decline (yellow on the chart) right after the ETF started trading that month. So, you could certainly argue that this was an event to sell short-term news. But investors who got too attached to that story missed out on an additional 85% of the subsequent rally (blue).In hindsight, BlackRock and the gang pitched those brand new Bitcoin funds to their customers, which led to more buying. was Something that should be taken very seriously.
How Bitcoin Price Reacted Before, During, and After SEC Approves Spot Bitcoin ETF in US. TradingView charts.
3. How to outperform most crypto investors over the long term.
GCR's success has been driven by constant and relentless research into new cryptocurrency opportunities. But if you don't have that kind of time, GCR says you can probably beat most traders by simply holding Bitcoin and Ethereum and not trading at all.
Posts about Bitcoin and Ether holdings and cryptocurrency trading from GCR's X account.
Indeed, an altcoin can outperform the number one or number two cryptocurrency at a given time. However, as we saw earlier this month, if market sentiment turns south, an even bigger decline is possible. After all, altcoins have a smaller market size than Bitcoin or Ether, so it doesn't take as much force to move the price.
If you are trading altcoins, you need to understand when to manage your risk and take cryptocurrency defenses when the market shows some warning signs. Also, when investing in altcoins for the long term, it helps to have confidence in the fundamentals of the altcoin so that it can withstand volatility.
What opportunities are there here?
GCR's 443,000-follower X account went dormant last April. However, on April 13th of this year, in the middle of a huge crypto fall, he posted a new tweet. We believe this is a good opportunity to scale up to high-conviction tokens. If you are well invested, just survive, hold spot positions and don't surrender. ”
The recent decline in the entire cryptocurrency market and GCR's X post on April 13th. Source: X, TradingView.
As a reminder, it's generally not wise to blindly follow advice you read in X. But given GCR's track record of publicly calling for market moves, I'm at least keeping an open mind.
