Today I want to unveil the biggest dark humor in the cryptocurrency circle: most people do not make money in a bull market. Yes, you heard that right. During the massive bull market when Bitcoin rose from 10,000 to 60,000, countless people excitedly entered, frequently traded, and in the end, not only did they not make money, but they might have lost money.
In the 2021 bull market, I had several friends like this around me. A entered when Bitcoin was at 20,000, sold at 30,000 thinking it had 'risen too much', chased the high at 50,000 due to FOMO, added to his position at 60,000, panicked and sold at 50,000 when it dropped, perfectly illustrating 'buy high, sell low'. B was even more extreme, trading over 200 times in the bull market for half a year, contributing 50,000 in fees to the platform, and ultimately losing 10% of his principal.
The most ironic thing is that my uncle, who knows nothing about coins, forgot that I gave him 0.1 bitcoins as a birthday gift at the end of 2020. When he remembered it at the end of 2021, he found it had increased sixfold. He did nothing, yet outperformed 90% of 'professional players'.
Today, let's break down those 'invisible traps' in the bull market.
1. The Four Major 'Profit Illusions' of a Bull Market
Illusion One: 'I have become smarter'
In a bull market, whatever you buy rises. You begin to think you are an investment genius, understanding candlestick charts and analyzing news, feeling like you can 'seize every opportunity'. This is not you becoming smarter; it's the market feeding you candy. When the tide goes out, you'll know who was swimming naked.
Illusion Two: 'This time is different'
Every bull market has a new narrative: 2017 was ICOs, 2021 was DeFi and NFTs. People believe 'this time it really changes the world, so valuations can be infinitely high.' But there is nothing new under the sun, and all the mania will eventually return to rationality.
Illusion Three: 'Time waits for no one'
FOMO (Fear of Missing Out) is the strongest catalyst in a bull market. You see others making money and feel you must get on board immediately or else you'll miss an era. So you chase the high prices and buy a lot at once. In investing, hasty decisions often lead to slow regrets.
Illusion Four: 'I will sell at the top'
Everyone thinks this way when entering the market. But when you really reach the top, all you hear is 'soon 100,000' and 'it will keep rising', and you'll find all sorts of reasons to convince yourself to 'hold on a bit longer'. As a result, not only did you not sell at the top, but you also bought in during the early stages of the decline and got trapped.
2. My 'Anti-Human Nature' Operation Checklist in a Bull Market
After the lessons from the last two bull markets, I set a set of 'Bull Market Survival Rules' for myself in 2021:
Rule One: Profit Target Backward Calculation Method
At the beginning of the bull market, I set clear profit targets:
Overall capital doubles, sell 30%
If it rises another 50%, sell another 30%
Break key trend lines (like the 30-week line), liquidate all
A bull market is for selling, not for believing in. When others are crazy, I need to calmly count my money.
Rule Two: No Car Change Principle
In a bull market, sectors rotate quickly; today it's DeFi, tomorrow it's NFT, and the day after it's the Metaverse. If you're always chasing trends, you'll often buy at high points and sell at low points. I choose:
Pre-positioning in 2-3 sectors I am optimistic about
After buying, unless the fundamentals deteriorate, do not act
Accept the reality that 'some cars run fast, some cars run slow'
Frequent changes can cause motion sickness; staying in one vehicle is the only way to reach the destination.
Rule Three: Decreasing Position Method
The higher it goes, the lighter the position. When my holdings exceed 100% profit, I start selling in batches, reducing my position from 90% to 70%, then down to 50%. The risks that arise from rising prices create opportunities for falling prices. In the later stages of a bull market, holding cash requires more courage than holding coins.
Rule Four: Information Diet Method
In a bull market, various 'wealth myths' and 'hundredfold codes' are rampant. I actively filter out 90% of the noise:
Exit all signal groups
Do not look at short-term analysis
Do not browse Twitter hot searches
Remain silent in the noise, stay clear-headed in the madness.
3. The Three Dangerous Signals of a Bull Market
When you see these signals, you should be fully alert:
Signal One: People around you who never invest start asking you how to buy coins
This is the classic 'shoeshine boy theory'. When the market is so hot that even the most uninformed people are entering, it may not be far from the peak.
Signal Two: Leverage Ratio Hits New Highs
Look at the funding rate across the entire network. When the funding rate remains high (e.g., above 0.1%), it indicates extreme greed in the market, and high leverage; a correction can trigger a chain of liquidations.
Signal Three: Narratives Become 'Fantastical'
When people start using 'stars and the sea' and 'changing the world' to explain the value of a meme coin while completely ignoring the fundamentals, it indicates that the market has entered an irrational phase.
4. The 'Bull Market Profit' Formula for Ordinary People
If you don't want to work hard in a bull market, remember this simple formula:
Bull Market Profit = Early Positioning + Patience Holding + Selling in Batches - Frequent Actions - FOMO Buying High - Leverage Gambling
Early positioning: Slowly buy the assets you are optimistic about during a bear market or at the beginning of a bull market.
Patience holding: Delete the software after buying, or set price alerts, and do not look at the market until the target is reached.
Selling in batches: Don't think about selling at the highest point; sell in 3-5 batches gradually during the rise.
Reduce actions: Every action in a bull market might make it hard for you to 'get back on board' after you get off.
Do not chase highs: Missing out is missing out; there will always be opportunities in the market, but your capital may only have one chance.
Do not use leverage: Bull markets have sudden drops, and a single leveraged liquidation can wipe out all your previous profits.
5. Your 'Bull Market Risk Management' Checklist
When the next bull market arrives, take out this checklist and ask yourself:
[ ] Have I set my profit target?
[ ] Have I written down my selling plan?
[ ] What is my current leverage ratio? (Should be 0)
[ ] When was my last action? (Ideally a week ago)
[ ] Has anyone around me started asking me how to buy coins?
[ ] Is my current mindset greedy or fearful? (Use the fear and greed index to judge objectively)
After so many years in the crypto world, my biggest realization is: A bull market is not for 'making money', but for 'realizing profits'. True money is accumulated slowly during a bear market and gradually converted into cash during a bull market.
Those who are the most excited, act the most frequently, and tell the most compelling stories in a bull market often end up suffering the most. Conversely, those who are the most silent, simplest, and even a bit 'boring' in a bull market can leave with real profits.
If you are also looking forward to the next bull market, I hope you can become a 'quiet profit maker' rather than a 'noisy participant'. Follow me, and in the next article, we will discuss something heart-wrenching: (Why do you always 'buy and it drops, sell and it rises'?)
Remember, in a bull market, the biggest risk is not missing out on a trend, but still being in the market when the trend ends.
#加密市场反弹 $ETH
