Yesterday, my short grid precisely took profit at $62,500, fully capturing the most lucrative profits from this wave of C wave decline. This morning, a strong bullish candlestick shot up, and the price was violently pulled to around $65,500-$66,000 in an instant.
The entire market has started to boil again, with the trapped bulls celebrating, and the funds that missed out feeling anxious, everyone is shouting 'The bull is back quickly.' But as a veteran who has been in the trading market for many years, the more this collective climax happens across the network, the more I like to distance myself, stand from the perspective of the opposing side, and conduct an absolutely rational 'Red vs Blue army confrontation.'
Today, we will not discuss the over-talked 'main downtrend' and 'macro bearishness.' Instead, let's talk about an extreme scenario that sends chills down the spines of all bears: What if the main force does not stop at $68,000 but directly violently pulls up to liquidate the shorts at $72,000 - $75,500? How likely is that? In this potential 10,000-point space, can we go long?
📉 First layer of game theory: What is the logic behind the 10,000-point 'extreme short squeeze'?
Don't think that $75,500 is out of reach. In the cryptocurrency market, filled with high leverage, 'tail risk' can erupt at any time. I believe the probability of this extreme scenario occurring is 25% - 30%, and the logic is extremely hardcore:
The instinct of liquidity hunting: The main force has already cleared the long fuel below around $62,500. If the market doesn't want to immediately plunge into the abyss of 50,000, this bulldozer of the main force will inevitably turn around to seek the most abundant liquidity pool above.
$68,000 domino effect: Currently, retail investors' stop-loss orders are densely clustered above $68,000. Once the spot buying force forcibly breaks this defense line, the passive closing of short positions (buying) will trigger a chain reaction.
Rapid surge in the vacuum zone: From $68,000 to $72,000, technically, it is an extremely fragile 'chip vacuum zone.' Once the short squeeze engine ignites, the price will surge like a runaway wild horse, instantly piercing into the ultimate liquidity acquisition zone of $72,500-$75,500.
🩸 Second layer of questioning: Since there is a 10,000-point space, why am I resolutely not going long?
Many smart people will ask: V Lian, since you see this 10,000-point profit space, why not casually open a long position at $65,500? The profit and loss ratio is extremely high!
This is the fatal divide between ordinary retail investors and mature hunters.
Never stand in front of a steamroller just to pick up coins.
This is the poison of countertrend guessing of tops and bottoms: The overall trend remains a C wave main decline. To aim for that 30% probability of a violent rebound against the 70% probability of macro declines is called 'profit and loss ratio illusion.' If the main force just crashes through $63,000 tonight, your long position will face nuclear-level stop-loss damage.
The disastrous split in long and short logic: If you are long, when the price reaches the core judgment point of $68,000, do you take profit or continue to hold your position? Switching back and forth between long and short thinking can easily lead to a trader's mental breakdown, ultimately returning all the profits made at $62,500.
🛡️ Ultimate countermeasure: The hunter's unity of knowledge and action.
In the face of a liquidation market that may blow up all technical indicators, we do not rely on gambling but on extremely strict system discipline:
Iron discipline one: Respect the judgment line of $68,000. As long as the daily/4-hour candlestick breaks above $68,000 with volume, all tactical short positions must stop-loss unconditionally. Acknowledge that this round, the bulls have obtained the 'short squeeze script.' Preserving the huge profits we gained at the bottom is the biggest victory. Absolutely do not counter-position!
Iron discipline two: The silent zone of $68,000 - $72,000. Once broken, the market will enter an irrational short squeeze period. In this range, keep your hands steady, drink tea, and watch the drama; absolutely do not try to 'short at the halfway point.' Let the crazy bullets fly for a while.
Iron discipline three: The ultimate ambush of $72,500 - $75,500. If the market really goes crazy and pushes the price into this pink 'liquidity acquisition zone' with significant volume and stagnation, this is the great gift the market gives us! Reassemble our forces and smash the trend shorts down hard. Because by then, the bulls' final vitality will have completely depleted.
💡 Advanced play (lottery strategy): If you really can’t resist this 10,000-point opportunity, take 5% of your profits to buy a deep out-of-the-money call option (OTM Call) with a strike price of $72,000 expiring over the weekend. If it skyrockets, you enjoy nonlinear profits; if it crashes, you only lose the cost of a meal, while your spot and main short positions remain safe. This is the true strategy.
The ultimate outcome of trading is not about who sees it accurately, but who can survive longer in extreme market conditions. Now, the script is already written, and the bottom card has been revealed. Bulls, dare you join this 10,000-point carnival?
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