Stop! Don't keep guessing 'the bottom has arrived' while looking at the K-line chart! Recently, the community is filled with people shouting 'buy the dip, buy the dip', and some even throw out their own compiled 'historical bottom data comparison table', confidently stating that this time it must be a major bottom. As an experienced analyst who has endured three cycles of bull and bear markets in the crypto world and fallen into the pit of 'buying the dip' eight times, I must pour a bucket of cold water today: our understanding of the 'market bottom' might be fundamentally wrong! This article has no nonsense, all the judgment logic is based on my real money investment. After reading it, you will find that those so-called 'bottom signals' are most likely just comforting lies!
Let me first share a heart-wrenching fact: 90% of people in the crypto circle do not rely on logic to judge the bottom; instead, they rely on 'wishful thinking'. Last year, when a certain mainstream coin dropped from 60,000 to 20,000, some said, 'It's down 60%, the bottom has arrived'; when it dropped to 18,000, others shouted, 'Valuation returns, buy with closed eyes'; the result is that when it dropped to 12,000, those calling for bottom buying were already trapped and couldn't even speak in the community. Why do people always stumble in their bottom judgments? The core issue is treating 'historical patterns' as 'ironclad laws' while ignoring the market's essence of 'dynamic change'.
Today, let's first dismantle 3 of the most common 'bottom lies', each of which hits countless people's pain points; after reading, don't step into pitfalls again!
The first lie: 'If it has fallen a lot, it must be the bottom.' This is the most naive judgment logic, no exception. Just like someone falling from the 10th floor, you can't say that if they fall 8 floors, they are 'about to hit the ground'; there might be a basement waiting. In the crypto market, 'price drop' is never the core indicator for judging the bottom; the key is to see whether 'the downward momentum has exhausted'. For example, some coins drop due to substantial bad news like project teams running away or regulatory crackdowns; even if they drop 90%, they might still just be halfway down. I have seen the worst cases where a coin dropped from 100 to 10, and everyone thought it was the bottom, only to see it finally drop to 0.5 and go completely to zero. So stop fixating on the percentage drop; first figure out 'why it dropped', which is far more important.
The second lie: 'A decrease in trading volume is a bottom signal.' Many novice analysts regard 'decreased trading volume' as an important sign of the bottom, claiming that 'if no one is selling, it naturally has reached the bottom.' But in my view, this is purely self-deception. A decrease in trading volume might occur for two reasons: one is that there really are no transactions, and the market enters a consolidation phase; the other is that everyone is 'waiting', anticipating that greater bad news will emerge. Especially in the current market environment, with so much external uncertainty, a decrease in trading volume is more likely to be 'the calm before the storm' rather than a bottom signal. I assess whether trading volume has hit the bottom by examining the 'chip structure'; if most chips are concentrated in high-level trapped areas, then even if the trading volume decreases, it's hard to form a bottom, as no one wants to be the 'greater fool'.
The third lie: 'When big players buy at the bottom, it means the bottom has arrived.' Every time the market crashes, there are reports saying 'a certain big player has bought at the bottom of a certain coin', and then a group of people follows suit. But I want to tell everyone that the big player's bottom buying is fundamentally different from your bottom buying. A big player might use only 1% of their funds to layout; even if they lose, it doesn't matter. But you might be fully invested, and if your judgment is wrong, you're completely done for. More importantly, many so-called 'big player bottom buying' news are released by people with ulterior motives, aiming to get retail investors to buy. Last year, there was a so-called 'crypto big player' who publicly stated that he bought at the bottom of a certain coin; as a result, retail investors followed in and the coin dropped 30%, only to discover later that the big player had already sold off quietly. So don’t blindly trust big players; believe in your own judgment logic.
Having discussed the lies, let me share 3 'core truths' for judging the bottom with you, all of which are valuable information; remember to save them!
The first truth: the bottom is 'polished' rather than 'guessed'. The true market bottom is never confirmed by just one big bullish candle, but needs a long period of consolidation, repeatedly testing the support level, until the support level is thoroughly solidified. Just like a hen hatching eggs, it requires enough time and patience; you can't rush it. For example, the bottom of the last bear market consolidated for a full 6 months, repeatedly testing the support level, until the chip structure was thoroughly optimized, before welcoming the bull market. So don’t think about 'precisely buying at the bottom'; being able to layout in the bottom area already puts you ahead of most people.
The second truth: the bottom needs 'fundamental support', not 'emotional support'. A true bottom must be accompanied by improvements in fundamentals, such as clear industry regulatory policies, technological breakthroughs in projects, ecological applications landing, etc. If it’s just because market sentiment has improved and you think it’s the bottom, then it’s most likely a 'false bottom'. For example, a certain ecological coin previously rebounded 50% from the bottom due to high community sentiment, and many thought the bottom had arrived; however, without fundamental support, it quickly dropped back down. Therefore, when judging the bottom, it’s essential to check whether there have been improvements in the fundamentals, as this is the most crucial support.
The third truth: the bottom requires 'position control', not 'full margin gambling'. Even if you judge the bottom area correctly, you cannot fully invest at once, because the market may experience a 'second bottom test'. When I layout at the bottom, I employ a 'phased building position' strategy, such as buying 20% of the position first, and if the market continues to drop, I add another 20%, and so on. This way, even if the market sees a second bottom test, I have enough funds to average down and reduce costs. Remember, in a bear market, the most important thing is not 'how much money to make', but 'to preserve the principal'. As long as the principal is intact, when the bull market comes, there will be opportunities to turn around.
Some people might say that even if they know all this, they still don't know how to act. Actually, it doesn't matter; the crypto market never has absolutely correct judgments. What we can do is to improve the probability of our judgments. As an old player who has been in the market for many years, I've seen too many people lose everything because they blindly tried to buy at the bottom, and too many miss the bottom because they are overly cautious. The key is to find a strategy that suits you, maintaining rationality and patience.
Next, I will continue to share practical skills for bottom layout, such as how to filter coins supported by fundamentals, how to judge chip structure, how to control the rhythm of building positions, and so on. If you don't want to keep stepping into pitfalls on the road to buying at the bottom and want to layout rationally with me, follow me @链上标哥 and don't get lost!
