Recently, the crypto market has shown a clear rebound, and many people are starting to focus on altcoins. To be honest, by the end of December, quite a few small tokens experienced good runs, and those who followed along benefited greatly. But here’s the problem: choosing the wrong coin, even in a good market, is pointless.

Instead of blindly following the trend, it’s better to understand how to select the right coins. I think there are three key points.

**First, look at correlation.** When choosing altcoins, it’s crucial to find those that are linked to Bitcoin, such as ETH, SOL, XRP. Stay away from projects that move independently because you can’t tell if they’re at a high or low level, which is essentially gambling.

**Second, examine the fundamentals.** The market cap should be substantial, and the project must have real business, applications, and revenue. Small projects with daily on-chain income of only a few hundred to a few thousand dollars rely entirely on the project team selling tokens to survive. Think about it: pulling the market requires real money to buy in, but issuing new tokens costs almost nothing. This asymmetrical structure makes long-term growth unrealistic.

**Third, consider liquidity.** Trade on top-tier platforms with normal trading volumes. Some tokens only have a few tens of thousands of dollars in daily volume, which is highly suspicious. Wash trading and spoofing are common, and such tokens are destined to zero.

Tokens that meet these criteria are worth paying attention to; ignore the rest.

Choosing the right coin is important, but timing is equally critical. Many people make a common mistake: right after Bitcoin begins its first surge, they rush to buy altcoins. Frankly, buying altcoins at that point is likely to be catching a falling knife. The real opportunity appears after Bitcoin’s first wave of gains is complete and it starts to retrace. In market terms, this is called Wave B or Wave 2, and that’s when altcoins tend to perform best.

Most altcoins only gain momentum after Bitcoin enters its main upward phase. Before that, it’s mostly sideways, dips, and consolidation, testing your patience.

As long as you can accurately judge which stage Bitcoin is in, a 50% or even double return on altcoins isn’t surprising. But the prerequisite is to thoroughly understand Bitcoin’s main trend; otherwise, playing with altcoins is purely a game of luck.