The Altcoin project chessboard — who's sitting at the table and when you're allowed to play

Core idea

Buying an altcoin means sitting down at a chessboard that already has 6 groups of players on it, almost all of whom have a cost basis many times lower than yours — buying later means entering in the weakest position. Hence the rule: only invest in altcoins once the market has clearly entered an uptrend (capital distributed evenly, every project rising); investing in altcoins during a downtrend/sideways/dormant period without an information edge means "your odds of winning are worse than playing the lottery."

Details

The 6 groups at an altcoin chessboard (ranked by cost basis, low → high)

1. The founding group — the people who design the project, do the technical work. Cost basis ~0 dong.
2. Angel investors / early-stage (seed) funds — put money in from the earliest stage. Why a project has to raise capital even when it has money on hand: (a) to spare its own capital; (b) to spread risk (the success rate of startup projects is very small); (c) a good project naturally attracts people wanting to invest — nobody willing to invest is itself a signal something's wrong with the project. Cost basis, for example, ~$0.10–0.20.
3. Influencers / KOLs / marketing group — brought in to promote, build community, raise visibility; often sold at a very cheap price or given free coins just in exchange for "value" (promotion). These are the "invitations" flooding a channel owner's inbox.
4. Staff / collaborators paid in coin — hold coins as a form of payment; can almost never lose money.
5. Market maker (the pump team) — usually outsourced (>90%) rather than the founding group itself. Paid in coin/cash; controls the pump-and-dump script, and is often the one pulling the strings behind the scenes.
6. Retail investors (you) — enter once the coin is already listed, with the highest cost basis (for example $3–5 versus $0.10 for the group above). This is the prey at the end of the chessboard.

(Note on the group count: in one session the teacher counted 7 groups, splitting out a separate group of people "who put in effort, not money" — miners, affiliates, airdrop hunters, community people earning a commission — as a tier right before retail investors. In session K2023 B41 the teacher merged it back down to 6. The underlying ladder doesn't change, only how it's grouped; keep the 6-group framework above as the standard, and remember that the "effort, not money" group sits wedged between tier 4 and tier 6. The question the teacher put to the class — "which number are you?" — had the whole class name their own number.)

Why the weak position is "almost certain to lose," not just a risk

• Small market cap = you can draw any pattern you like. With a small-cap altcoin, the chart can be made to look like a head-and-shoulders or any pattern at all → technical analysis on small altcoins is nearly meaningless.
• Not sharing the same vision = risk stacked on risk. Even if the founding group has a long-term vision, groups 2/3/5 can sell early the moment the coin lists and pumps 5–20x → the price crashes → trust is lost → the project dies even though it started out "good."
• Lock-up terms (from roughly the 2021 season on): to block early dumping, seed/early group coins are locked for 2–3 years before they can be sold — proof that even insiders are guarding against each other.
• In reality the market has more than ~20,000 projects, and most of the tens of thousands of them exist purely to serve the purposes of the groups above, with no real product or vision.

The rule for when to invest in altcoins

• ONLY invest in altcoins when the market shows signs of an uptrend/altseason — that's when capital is distributed evenly, every project gets pumped with capital → lowest risk, highest reward.
• DO NOT invest in altcoins during a downtrend/sideways/dormant period unless you have inside information or a real edge. This is no longer "gambling" (gambling at least has a chance of winning/losing) but a cut-throat game — you are the prey.
• If you still want to get into a good project during a phase where it's being "pumped up": only put in small capital, treated as money you're fine losing.
• Position beats price: buying at the start of an uptrend means paying an absolute price higher than the bottom, but the position is better and the risk far lower than "catching the bottom" during a dormant period (see Risk wave vs profit wave (the 80/20 rule) on prioritizing capital preservation first).

Trading is for preparing, altseason is for harvesting

The teacher stresses: don't just fixate on deploying capital to "catch the uptrend wave" (a cycle that happens roughly once every 4–5–7 years). The downtrend/sideways period is the time to forge knowledge–discipline–experience and build capital through trading, so that by the time altseason arrives you're big enough (both in ability and as a person) to hold onto what you've gained. "A rising tide lifts all boats" — in an uptrend everyone looks like a genius; but whoever lacks knowledge/discipline will lose the money the same way it came in.

Three capital baskets once wave season has arrived

Once the timing is right (uptrend/altseason), rule number one is split your capital, don't pile it all into one alt. The reason the teacher states outright: the entire market, at the time of the session (~$1,000 billion), is still a "paper promise," nothing yet brought into reality — confidence in any single project can go to 0 at any time.

(The 20% weight for basket 3 is clear in the transcript; the two 40/40 figures are inferred from the remainder — the subtitles for that segment are noisy. Keep the 3-basket framework as the main takeaway; for the exact figures, go back to.)

• Number of coins: the teacher says around 10–15 coins is about right.
• Stop-loss for spot holdings: follow the DAILY TIMEFRAME BOTTOM OF BTC, not each alt's individual chart. BTC breaks its 1D bottom → exit; BTC still above its bottom → hold. This is a direct consequence of "a rising tide lifts all boats": alts have almost no life of their own.

Tokenomics is used to FILTER AT THE BUY, not to manage the trade

The classic question "do I need to learn tokenomics to buy altcoins?" — the teacher's answer:

• Tokenomics / roadmap / project model are only a filter at the BUY STEP. Meets the criteria → buy.
• After buying, the hold-or-close decision is based on THE BTC CHART, not tokenomics again. BTC still in an uptrend means the alt is still in an uptrend; no shark closes an alt early while BTC is still pushing (doing so leaves money on the table). The moment they pump the alt is when BTC is sideways — that's when they profit both in USD terms and in BTC terms. Recall the three exchange-rate pairs ALT/USD · BTC/USD · ALT/BTC (Wave scenarios when the market IS TRENDING).
• In a downtrend / dormant period: startup coins lack the funds to sustain the project, so they die easily (unless there's a long-term fund pumping money in). Picking out a few winning projects among tens of thousands of coins is no different from playing the lottery — you can't get better than a 50–70% edge. A low-cap can be made to fit any pattern you like. And never play on inside information, even when someone hands it to you ready-made.

The "Christmas tree" only happens at small market caps

The phenomenon of price rising then plunging in one straight line, with no pullback, no wave-4/wave-5 rhythm — students jokingly call it a "Christmas tree." The teacher states flatly: it does not happen at the overall market level.

It doesn't happen with the VN-Index, with the Nasdaq index, and it doesn't happen with Bitcoin — because BTC functions as an index representing the overall psychology of the whole crypto market, exactly like the VN-Index for Vietnamese stocks. It only happens when someone pushes the price locally on a single small-cap ticker/coin, i.e. manipulates it — exactly the chessboard described above.

Three reasons nobody can pull that off on an index or on BTC:

1. If one fund dumps in a shock, another fund jumps in, because it's a bargain — and the dumping fund is the one that loses.
2. A straight dump leaves no liquidity to close into. To sell a large amount you need buyers; so before a drop, there always has to be a distribution zone paired with good news to create FOMO and generate liquidity. That very need for liquidity is what creates the sideways/distribution zone you can read on the chart.
3. Once trust / FOMO has formed, it has to be eroded gradually, it can't reverse 180° in a single move (see Psychological developments on the chart — why you still make mistakes even with the knowledge).

One more point about shark behavior: they don't close everything. Even at big wave swings, they only take a portion of profit, because releasing just a small fraction of their held coins is enough to crash the price hard. They have to keep reserves to retain the power to steer the price — selling everything means losing the steering wheel.

Application: seeing some coin go "Christmas tree" is an almost certain sign of manipulated, small-market-cap goods → technical analysis on it is meaningless, stay away. And seeing BTC "about to Christmas tree" is your own fear talking, not a market scenario.

Putting it into practice

• Before buying any altcoin, ask yourself: which group number am I at this chessboard? What's the cost basis of the groups above me, compared to mine?
• Check the macro shape: is it uptrend/altseason or downtrend/sideways? If it's not an uptrend and you have no edge → stay out.
• Don't trust technical analysis on small-cap altcoins (the chart is being steered).
• Treat a dull market phase as a season for accumulating knowledge + capital, not a season for trying to catch the altcoin bottom.

What the teacher stresses / common traps

• Biggest trap: buying altcoins during a dormant/downtrend period because the price looks "cheap" — this is the weakest position on the whole chessboard, with roughly a 99% chance of losing.
• The teacher admits: even when invited to promote a project (fast and generous pay) he has never accepted — because "I know enough already," to stay fair to the community. → warning sign: watch out for any KOL/channel that's sitting in "group 3" of a project.
• "Heaven only pays you what you deserve, not what you wish for."

"the alt hasn't returned to its old bottom" is not good news — The torture mechanism

A phenomenon that causes misunderstanding: BTC falls hard while an altcoin still "holds its price," not returning to its old bottom. Many people read this as "some mysterious buying pressure is supporting it." The teacher's reading is the opposite:

• The alt's holdings at the top are sitting in the hands of ~99% of the crowd, who are holding a loss. They haven't sold because they haven't been tortured enough yet.
• The sharks use BTC's own price as the tool: BTC falls for an extended time → investors lose patience with the alt → they sell it themselves. No need to crash the alt directly.
• The sharks already sold most of the alt higher up, not at the current bottom zone. The market maker's goal in the downtrend/sideways phase is to sow boredom and disappointment, not to keep pumping the story.

Why a trend doesn't end with a sharp peak: the crowd's confidence is too large, so it has to be worn down gradually before it can all be sold off; and the sharks themselves can't close in one shot either (closing in one shot crashes the price, ruining their own selling price). The one exception is an extremely large event — for example, a government banning it outright. The metaphor the teacher uses: someone controlling the price of rice / selling oranges at the top has already taken some profit, but still holds capital in reserve to force the price down and buy back cheap, rather than "finishing distribution and being done."

Capital tactics & alt selection in this phase

• The teacher repeats the weighting stated in the previous session: lean heavily toward BTC (~80%), only ~20% for alts. (The 80/20 figure comes from Hermes's distilled version; no directly confirming passage was found in the B26 transcript — Mr. Cường can cross-check if he wants the exact quote. The qualitative point of "leaning heavily toward BTC" is certainly correct.)
• Putting money into alts when there's no trend, no story, no new game is pointless. When BTC is sideways, an alt's force is weak; any alt that rises during that period is usually just a project manipulating its own price.
• If you still use part of your capital for alts: prioritize large-cap coins and coins that are still holding support. Breaking support = the internal sell pressure within the project is too large → avoid.

MARKET MAKERS NEED EXACTLY TWO EFFECTS — and why token locks can't save you

The two effects required for an asset to rise in price

The teacher states this as a general rule for stocks, real estate, mutated orchids, and coins — not crypto alone. To push something's price up, the pumping team has to create two effects simultaneously:

1. The media effect — the project "looks good": vision, team, roadmap, news.
2. The price effect — the price itself has to run first.

The second part is the one people usually overlook, and it explains a lot: a good product with a flat price gets nobody's attention. The metaphor the teacher uses: an orchid with a beautiful pedigree and a rare strain, but if the price is stagnant, nobody buys it; however good a company is, if the stock trades sideways, retail investors don't come in. BTC itself is the same — if it had stayed around $12 for the past ten years, no community would ever have FOMO'd into it.

The consequence for you: when you see a project that has "good news and a running price" at the same time, that is not two independent pieces of evidence confirming each other. It's the mandatory pair that makes up a single campaign. Reading them as two separate confirmations is walking straight into the trap they were designed to be.

A typical sequence the teacher describes: price $0.2 → pushed to $1 → up to $2 to create the effect → KOLs call the community to buy up to $5–6 (the early group closes out at ~30x) → the crowd is left hanging at $6–7 and the $10 level never arrives. Same mechanism as farmland: 2 million → news breaks of an expressway/big corporation coming in → 5 million → brokers push it further to 10–15–17 million → the last person ends up sitting at the top.

Token locks: they seal off the front door, leave the side door open

The 1–2 year lock-up term (common after the 2021 season) does block the seed/early group from dumping the moment it lists. But the teacher points out the gap: the team locks up the team's share, but nobody knows the true ratio for the marketing fund / development fund / risk-reserve fund — and that portion can still be dumped into the market normally. Locking reduces early sell pressure, it doesn't erase it, because it can't touch the underlying greed of anyone holding coins bought at zero dong.

A deeper risk is a human risk, not a project risk: buying at $0.1, rising to $10 (100x) without closing out because you "still trust the project," then the price drifts down to $3 — the early group dumps first → the price crashes → the team runs out of operating funds → the project dies → the community dies with it. One layer deeper: if the seed/private group makes a deal with the market maker behind the founding group's back, even the founder gets pushed aside. This is why "5-year value investing always works out somehow" barely applies to most tokens.

The CAT-AND-MOUSE game — the logic of the downtrend/sideways phase

In an uptrend, market makers earn by riding along with BTC. In a downtrend/sideways period that door closes — so they invent a bait-and-switch game: holding BTC, they lure you into alts; once an alt builds up trust, it gradually slides down; another group of coins rises to pull you into dumping this one for that one. The teacher calls this cat-and-mouse / juggling the ball, and describes its logic very bluntly: "if you guys buy this coin, I won't pump it — I'll pump some other one instead."

This is not investment logic, it's wishful-thinking logic. In this phase:

• The goal shifts from "making money" to "KEEPING money." Having already earned enough in the uptrend, this phase should prioritize safety — anyone managing serious money has to think this way.
• Seeing the whole market fall while a scattered few alts spike hard: it's almost always a manipulation trap, not "real capital going against the storm." The check is simple — if BTC is falling, then even the team/early group is losing on the portion measured in BTC, so where would the money come from to sustainably support a counter-trend alt wave?
• The size of the reward doesn't match the risk either: an alt in a downtrend rallies at most a few dozen percent (a small coin might get lucky at 2x); a large-cap alt only a few dozen percent. Trading BTC is easier work. Seeing an ad promising a sustained 5–20x during a downtrend = manipulation followed by a dump on latecomers.
• The odds: roughly 20,000 coins, in a bear market only about a dozen rise → getting the right one is about 1/2,000, the teacher says flatly it's worse than the lottery.
• About "coming pump" tips people pick up: the teacher files these straight under garbage — because in reality the price runs first and the news comes out afterward, and there's no news system anywhere that can tell you in advance which coin is about to be pumped.

The motto: a rising tide lifts all boats — alts only get distributed capital once BTC rises; when BTC falls, stay out, and absolutely do not jump into an alt "going against the tide."

Variables you're allowed to analyze vs. variables you're not

A very usable way to sort things:

• Don't get involved: an Elon tweet, a status update from some corporation that sends a coin flying. Getting in on that means you're being led, not investing — and there's no way to quantify in advance how much you'd lose or gain.
• Allowed to analyze: technicals, capital flow, trend, trend strength. The one distinguishing criterion: before you get in, you must know in advance how much you stand to lose and how much you stand to gain.

Related lessons

• Risk wave vs profit wave (the 80/20 rule) — prioritize avoiding risk first, position beats price
• 20 investing rules + the 3 stages of improving your trading — capital flow is the cause, news is the consequence; the "game" rules of investing
• News & the market (narrative, good/bad news, capital flow) — narrative is a shark's tool, placing news according to wave position