Top 3 Crypto Price Prediction Mistakes

Hint: Look at the Market Cap…NOT the Price!

Col Jung
7 min readJul 18, 2021
Image credit: Shutterstock (Fair Use)

A hallmark of cryptocurrency bull runs is retail FOMO. New investors enter the space en-masse and speculate into various tokens toward peak prices. To complicate matters, the 2021 bull run saw the explosion of leveraged trading.

What’s the result? Loss and disaster.

Pumps always come with dumps. And mass liquidations on leveraged traders cause dumps to be dumpier than they need to be.

Smart money — hedge funds, institutions and whales — then swoop up the bargain bitcoin at the expense of the little guys.

Lessons. Don’t FOMO. Don’t buy into resistance. Check your emotions at the door. Importantly, have an idea when the crypto market is running too hot.

How do we know when tokens are overvalued?

There is no consensus on how to value cryptocurrencies. This is a major problem in the crypto space and will remain so while blockchain technology remain nascent.

Do we look at the hash rates? Do we put a value on the size of the network? It’s complicated and subjective even for seasoned pundits.

As a result, many new investors focus on the price. For example, the price of 1 BTC is $32,000. The price of 1 ETH is…