The market always rewards those who can stay clear-headed amid panic
Many readers are curious about how I made a profit of $200,000 on ETH. Today, I will candidly share the journey and experiences of this trade—bottoms are not predicted, but endured.
Last year, when ETH started to drop from $2300, I began to accumulate in batches. Unexpectedly, after buying, the price continued to fall to $1400, and there was widespread panic in the market 12. At that time, social media was filled with pessimistic comments like 'Ethereum is going to drop to $500,' and even some veteran investors began to waver 6.
In that situation, I was not swayed by emotions but adhered to the plan of gradually building positions. For every certain drop, I would add to my position once, ultimately controlling the average cost at around $1600 2. Looking back now, ETH has oscillated between $1400 and $1800 for nearly a month, giving everyone ample time to enter 1.
Three main reasons why most people miss good opportunities
Why do most people still miss out in the face of such obvious opportunities? I have observed three key factors:
Fear psychology dominates: When the market is generally in panic, many people, even if they recognize value, dare not take action 24. I clearly remember that the Fear and Greed Index once fell below 20, and market sentiment was extremely pessimistic, which was precisely a good opportunity for contrarian investment 12.
Short-term thinking prevails: Many investors lack patience, exiting profits too early or turning to other targets. ETH oscillated in the bottom area for a month, but many couldn't wait even a week 3.
The mindset of shorting against the trend: Some investors not only did not buy in the bottom area but instead shorted, completely missing out on the subsequent rebound 4.
How to identify and seize market bottoms?
Through this experience, I have summarized several practical methods for identifying market bottoms:
Technical indicators reference: When the RSI indicator is below 30, it indicates that the market may be in an oversold state, signaling a time for gradual buying 12. At the same time, a price significantly below the 200-day moving average often means an increased likelihood of mean reversion 13.
Pay attention to market sentiment indicators: the Fear and Greed Index is a great contrarian indicator. When the index is below 20 (extreme fear), it is usually a good time to buy long-term 23.
Fundamental support: Even during price declines, Ethereum's fundamentals continue to improve. The burning mechanism implemented by EIP-1559, the low inflation rate after the PoS transition, and the flourishing development of the Layer 2 ecosystem all provide solid support for ETH's value 18.
For the future market, I remain cautiously optimistic. Although ETH has already experienced a rebound, in the long term, Ethereum's leading position in the blockchain field and the continuous development of application scenarios such as DeFi and NFTs will continue to support its value 38.
The investment market is never about who is smarter, but rather who is more patient. The real opportunities to make big money often arise in the most panicked moments of the market, and investors who can overcome fear and rationally allocate will ultimately reap substantial rewards.
I hope my experience can provide you with valuable references. If you want to learn more about cryptocurrency investment analysis, feel free to keep an eye on my updates.
