Every time the market experiences a deep V-shaped rebound, there are always people shouting, 'The bull is back quickly,' but when they chase in, they find it's a 'dead cat bounce'—cutting losses at the ankles! As someone who has experienced both bull and bear markets, I have summarized a set of data-driven methods to distinguish the truth, which I will share with you today for free.
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Why are you always tricked by 'false rebounds'? Three major misconceptions revealed.
Misconception one: A large drop = bottom.
In May 2021, BTC fell from $64,000 to $30,000, and many exclaimed, 'The bottom must be bought,' but the price continued to decline to $17,500! The truth: a drop does not indicate a bottom; blindly buying the dip is like catching a falling knife.
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Myth 2: A rebound = opportunity
In June 2022, BTC rebounded to $23,000, and retail investors frantically chased the rise, only to see it drop to $16,000 six months later. The truth: rebound ≠ reversal. Chasing high is often the beginning of a trap.
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Myth 3: Making decisions based on feelings
“I think it has dropped enough” “I’m optimistic about this coin” - the market specializes in treating various 'I think' statements. The truth: Emotions are the root of losses; data is the weapon for survival.
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Three major true rebound signals: Data doesn't lie!
Signal 1: Capital flow - Net outflow from exchanges > Net inflow
Logic: Funds withdrawing from exchanges indicate that holders prefer to hoard rather than sell.
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Data validation: Continuous net outflow for 3 days, true rebound probability exceeds 80%. Current situation: As of December 5, exchange BTC balance decreased by 0.1 million pieces, with a continuous net outflow for 4 days ✅ **
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Signal 2: Whale movements - Top 100 addresses increased holdings > 1%
Logic: Whales are smart money, and their accumulation represents confidence in the future market.
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Data validation: Accumulation over 1% leads to a 75% chance of a true rebound. Current situation: The top 100 addresses increased holdings by 2.1% this week, reaching a new high for the year ✅ **
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Signal 3: Market sentiment - Fear index < 30 and sustained for 3 days
Logic: Extreme panic makes the market prone to reversal.
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Data validation: Fear index below 30 and stabilizing increases the reliability of rebounds. Current situation: Fear index at 28, sustained for 2 days; if it remains below 30 tomorrow, the signal is confirmed ⏳ **
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My operational strategy: Better to miss out than to make a mistake!
Build positions in batches, reject all-in
Use 30%-30%-40% for batch entry: the first position is entered after signal confirmation, the second position is added during a key support pullback, and the remaining positions are reserved for additional purchases during a breakout.
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Stop-loss rule: break previous low must cut loss
Set stop-loss line at BTC previous low of $85,000; exit immediately if it drops below. Remember: survive to wait for the real bull market.
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Daily review of three signals
Create a simple table to track data; reduce positions by 30% if any signal reverses.
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Date
Net outflow from exchanges
Whale holding ratio
Fear index
Operational advice
12.05
✅ 21,000 pieces
✅ 2.1%
⏳ 28
Hold and observe
12.06
To be updated
To be updated
Key day
Decide to increase/decrease positions
In conclusion: the market always rewards rational people
The difference between retail investors and winners is not about how skilled they are technically, but whether they can use data to combat emotions. Currently, two out of the three major signals have been satisfied. If the fear index stabilizes tomorrow, it could likely be a precursor to a trend reversal! #牛市前兆 #熊市预警 If you are lost in trapped orders and don’t know how to operate, follow me, and I will help you avoid pitfalls with practical experience, steadily protect your principal, and slowly earn profits!
