That divorce agreement has yellowed, but the words 'What can you do without me?' are still etched in my heart. It was this sentence that set me on the irreversible path to truly understanding the market.
Six years ago that evening, after signing the divorce agreement, I sat in the empty living room, lost in thought. My ex-wife's words not only shattered the shell of my 'financial man' persona but also made me see my awkward position between traditional finance and the crypto world. At that time, I was neither a true cryptocurrency expert nor had I established myself in the traditional financial field.
Writing this today is not to prove anything, but to share the real growth experience of an ordinary person in the cryptocurrency market. The change in my bank card balance from five digits to eight digits is merely a superficial phenomenon; what truly holds value are the six survival rules in the market that I have traded with real money over the years.
Rule One: Large funds build positions quietly.
Many people chase coins that surge, but in my observation, truly promising projects often show a type of 'anti-dip' behavior before they launch. For example, after Bitcoin's sharp decline in March 2020, some tokens recovered significantly faster than other assets, and their declines during pullbacks were limited, which usually indicates that funds are secretly absorbing chips.
My own experience is not to be misled by a single day’s large bullish candle, but to focus on the trends over three to five days. If trading volume gradually shrinks during price pullbacks but increases during rises, this rhythm often indicates that large funds are quietly positioning themselves. By the time everyone notices, the first wave of profit-taking opportunities has already passed.
Rule Two: When funds withdraw, they never drag their feet.
Many people ask me how to determine whether institutional funds are withdrawing. It's actually very simple: a true decline is a weak rebound. For example, during the market wave from April to May 2021, some altcoins rebounded weakly after a decline and even consolidated sideways—this is a clear signal of fund withdrawal.
I have a painful lesson: I was heavily invested in a DeFi project, and after good news was released, the price did not rise but fell instead. Each rebound became weaker. I deceived myself into thinking it was 'oversold,' resulting in a loss of most of my position. The market is never wrong; what is wrong is our wishful thinking.
Rule Three: Trading volume speaks, but you must understand what it is saying.
Traditional technical analysis often says 'extreme volume indicates a peak,' but I have found that in the crypto market, continuous low-volume increases are the real signals to watch out for. For instance, when Bitcoin set a historical high in November 2021, the trading volume had actually been decreasing for several months—this is a typical top divergence.
To judge whether trading volume is healthy, I have a simple method: compare the average trading volume of the last month with that of the previous three months. If the price hits a new high while trading volume continues to shrink, caution is warranted. The relationship between volume and price is like breathing; there must be a rhythm to inhaling (accumulating) and exhaling (distributing), otherwise the market will 'suffocate.'
Rule Four: The bottom is磨出来的, not冲出来的.
Many investors expect a V-shaped reversal, but the true bottom is often formed by repeated oscillations. I have summarized 'three essential elements for bottom confirmation': first, the price must oscillate within a certain range for at least three weeks; second, trading volume must gradually shrink during declines; finally, there must be accompanying volume when breaking out.
Taking the market in January this year as an example, Bitcoin oscillated in the range of $38,000 to $42,000 for nearly a month, with each drop to $38,000 showing a significant decrease in trading volume, while breaking above $42,000 saw a significant increase in volume. This is a fairly standard bottom-building process.
Rule Five: All price fluctuations ultimately reflect human nature.
I increasingly feel that K-line charts are just the surface; market sentiment is the essence. I spend time browsing major social media platforms every day, not to find trading signals, but to gauge market sentiment.
I have a simple emotional indicator: when almost no one is discussing the market on social media, it is often a bottom area; when everyone is showcasing profits and calling themselves 'teachers,' the risk is often the highest. The market is most lively when you should remain the most clear-headed.
Rule Six: The highest trading state is 'not caring.'
This may sound a bit mystical, but it is indeed my greatest insight over the years. The best trading state is 'desireless'—not anxious about being in cash, not fanatic when fully invested.
I have now set rules for myself: a single trade loss should not exceed 2% of total funds, a single day’s trades should not exceed 3 times, and I will regularly review each week. This discipline allowed me to survive the bear market of 2022 and seize several key opportunities in 2023.
Heartfelt words to fellow travelers.
I am not a deity, just an ordinary market participant. The fairest and cruelest aspect of this industry is: your account balance never lies.
If you are currently in a phase of confusion, my advice is: stop, take a deep breath. Money can be earned endlessly, but the principal can be lost completely. Trade less, observe more; protecting your principal is more important than anything else.
The market is always there, and opportunities are always there, but only those who live long enough can wait for their own wave of the market. This is not a motivational quote, but a survivor's lesson.
Follow Xiang Ge to learn more first-hand information and knowledge about the crypto world, precise points, become your navigation in the crypto space, learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
