The market is likely to welcome a short-term rebound (commonly referred to as 'mean reversion'), but don't rush to go all in at once; buy in batches, control risks, and be cautious as the trend may continue to decline.
1. What is the current market situation?
Liquidation + Emotion: In the past 24 hours, $370 million has been liquidated across the network, mostly involving bullish investors (longs) being forced to close positions, with $135 million in long positions for Bitcoin alone wiped out, and 123,000 traders exiting; the market greed index is only 18, indicating an 'everyone is panicking and selling too aggressively' oversold state, and the leveraged funds have been mostly washed out, giving a strong impetus for a rebound.
Capital + Willingness to Trade: Bitcoin is around $85000, and the buying capital (spot buying) has recently increased in the last half hour, providing support; Ethereum is around $2800, and those who previously shorted (bears) are starting to want to close their positions to lock in profits, which may trigger a 'short squeeze' and drive the price rebound.
Historical Pattern: After such a large-scale liquidation has occurred, the market usually rebounds by 3%-5%, and the rebound period generally lasts 1-3 days.
II. How to operate? (Reference on December 18, current Bitcoin ≈ $86000, Ethereum ≈ $2820)
How to buy: Build positions in batches, do not all in.
Bitcoin: First, take 30% of the money to buy between $84500 and $85500; if it falls below $83000, quickly stop loss (do not let the loss expand); wait until it rises to $88000-$89000, sell 40% to lock in profits, and around $90000 is about the time to liquidate.
Ethereum: First, take 30% of the money to buy between $2780 and $2800; if it falls below $2700, immediately stop loss; sell 40% when it rises to $2900-$2950, and liquidate around $3000.
Position and Risk Control: For a single cryptocurrency, buy with at most 30% of the funds, and the total position across all cryptocurrencies should not exceed 50%; the maximum acceptable loss for each trade should not exceed 2% of the total capital; if the rebound does not reach the target price and starts to fall, immediately stop loss and exit.
Alternative plan for fear of missing out: You can take a little less money to do a 'spot + call option' combination, for example, buy Bitcoin spot at $85000, then sell a call option at $89000, which can lock in part of the profits and reduce holding costs.
III. What risks should be noted?
Trend Risk: If Bitcoin really falls below $83000 and Ethereum falls below $2700, then the logic of the rebound will not hold, and it may continue to fall sharply.
Other Risks: At the end of the year, institutions may sell assets to realize profits, leading to reduced market liquidity; also, changes in Federal Reserve policies and other macro news may result in a rebound that does not meet expectations.
Position Discipline: Do not leverage too high, maximum 1x, to avoid being liquidated again; when reaching the target price, decisively sell part of it, and do not be greedy thinking it can rise more.
Do you need me to organize these operations into a concise table of 'buy price - add position price - reduce position price - stop loss price', and you can directly follow it?
