Why Do 90% of Investors Lose Money on Altcoins Just Because They Overlook This Factor?

When investing in altcoins (small coins), apart from being concerned about the price or the project story, a crucial factor that is often overlooked by many investors is liquidity. Liquidity is most clearly reflected through the trading volume in 24 hours – this is an indicator that reflects whether the capital is truly flowing into that coin or not. If an altcoin only has a trading volume of a few tens of thousands to a few hundred thousand USD per day, then the risk is extremely high, because: Unsustainable price manipulation: The market is easily manipulated by a few speculative groups or “big players”, who can push the price up and then dump immediately. Lack of market makers (market maker): When market makers withdraw, the order book (orderbook) becomes thin, making buying and selling difficult; just one large order can cause significant price fluctuations. Prone to “pump & dump”: These coins often only attract short-term speculative capital, rising quickly and then withdrawing, leading to unsustainable trends. On the contrary, if an altcoin has an average trading volume of 30 days reaching 5 million USD or more per day, it indicates: Good liquidity: Investors can easily buy and sell without worrying about significant slippage. Stable cash flow: Indicates that there are still market makers and institutional investors participating in maintaining the market. More sustainable uptrend: When cash flow continuously pours in, price increases are likely to last longer, not just relying on short-term speculative waves. Reducing deep downside risk: When the market adjusts, there is still buying support to help limit excessive declines. 👉 Therefore, when choosing altcoin to invest in, you can apply the following simple principle: Altcoin with high liquidity ( ≥ 5 million USD/24h in 30 days ): Suitable for medium to long-term holding. Altcoin with low liquidity ( < 5 million USD/24h ): Should only be considered as a short-term trading opportunity, not suitable for holding long. When comparing your investment portfolio according to this criterion, you will quickly realize which coin is safe to hold for the long term and which coin should only be traded in the short term. This is an effective way to filter your portfolio, helping you avoid falling into low liquidity projects and limiting the risk of being “stuck with inventory”.