The cryptocurrency market these days is even more thrilling than a roller coaster; one moment you're fantasizing about a breakout, and the next you're being pressed down and rubbed into the ground! Especially with this wave of Ethereum's crash washing out the market, it can be called a 'bloodbath'—whether it's the retail investors chasing the trend or the big players and institutions holding substantial funds, many have been directly hit to the point of questioning their lives, and long positions have fallen like dominoes one after another. At this moment, many people are probably scratching their heads: is the short position about to face the 'liquidation moment'? The market should touch the bottom and rebound for a wave, right? And about yesterday's Ethereum position at 3030, could it really be the ceiling in the short term?
After discussing Ethereum, let's talk about another popular cryptocurrency, ALCH. Some friends may have noticed that its current market capitalization of 189 million is actually not low, but interestingly, many people in the market are shorting it, creating a somewhat bizarre atmosphere of 'everyone is shorting while I am awake'. At this point, a key question arises: will it suddenly perform a 'big bullish candle that blows up all short positions'? Objectively speaking, this possibility cannot be completely ruled out, as the crypto market is never short of 'black swans' and 'reversal scripts'. Because of this, I consistently emphasize to my trading friends that whether going long or short, setting a stop-loss is crucial. For instance, when I focus on ALCH, I set my stop-loss at 0.24. Only by doing this can I protect my position during sudden market changes and avoid being swept away in a wave, which is the most basic 'survival rule' in trading.
At this point, some may ask: since there are many people shorting ALCH in the market, why do you also lean towards shorting it? The reason is quite simple; clear signals can be found from the technical analysis. My long-time followers know that I place great importance on the 4-hour chart when analyzing cryptocurrencies, and ALCH's 4-hour chart has clearly shown a top divergence pattern. Some new friends may not be familiar with top divergence, so let me briefly explain: top divergence occurs when the price is making new highs, but the corresponding technical indicators are continuously declining. This is a typical warning signal for a trend reversal, indicating that the upward momentum is insufficient, and the probability of a subsequent decline will significantly increase.
In addition to the key signal of top divergence, issues can also be identified from the liquidity perspective. There is clearly heavy selling pressure above ALCH. Simply put, the volume of selling is much greater than that of buying, and the buyers do not have enough power to absorb the selling pressure above, which naturally leads to continued price suppression. In this situation, blindly going long is undoubtedly like 'taking chestnuts from the fire'. Rather than risking significant losses by betting on a reversal, it is better to follow the market trend while ensuring proper stop-loss protection; this is the essence of a sound trading strategy.
Of course, some friends might say that recent market fluctuations have also been influenced by external factors, such as the better-than-expected U.S. non-farm payroll data and dynamic regulatory developments, which could all become variables affecting the market. However, in my view, regardless of how the external environment changes, the core signals from technical analysis and market liquidity are the fundamental basis for our trading decisions. External news plays more of a 'catalytic role' rather than a decisive one.
Finally, let me share a heartfelt message: crypto trading is never about 'gambling', but rather a systematic operation that combines technical analysis, liquidity trends, and risk management. Many friends who faced liquidation these days did so because they did not set stop-losses or blindly followed trends without caution. If you do not want to become 'cannon fodder' amidst market fluctuations and wish to learn more about intraday trading strategies and core skills for market judgment, do you think Ethereum will break through the resistance level of 3030 next? Will ALCH experience a reversal that blows up short positions?
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