Brothers, I found a pattern: every time the market drops, someone asks me, 'Is it going to zero?' When the market rises, someone asks, 'Is it going to be a bull market? Quick, load up!' To be honest, you are not trading cryptocurrencies; you are gambling on guesses! Today, I will share some valuable insights with you about the cyclical logic of the cryptocurrency market. Understand this, and you can surpass 80% of retail investors!
First of all, everyone needs to be clear about one thing: the cryptocurrency market does not fluctuate randomly; it has its own cycles, just like the macroeconomy. Generally speaking, the cycles of the cryptocurrency market can be divided into four stages: the end of a bear market, the beginning of a bull market, the middle of a bull market, and the beginning of a bear market. The market sentiment and operational logic in each stage are completely different.
What are the characteristics of the late bear market? The market is full of wailing, trading volume is extremely low, and many project prices have fallen to just a fraction of their peak, with many projects even announcing bankruptcy. At this time, most retail investors have already cut their losses and left the market, losing confidence. However, this is precisely a good time to position yourself! Because market valuations have dropped to historical lows, many quality projects are severely undervalued. Just like the end of 2022 to the beginning of 2023, that period was a typical late bear market, and those who bought some mainstream projects at that time have made a considerable profit now.
Next is the early bull market, where the market starts to slowly warm up, trading volume gradually increases, and the prices of some mainstream projects begin to rise steadily. At this time, market sentiment is still relatively cautious, and many people are still doubting whether this is a rebound. The operating logic at this time is 'buy on dips and hold firmly'; do not be intimidated by short-term fluctuations.
The mid-bull market is quite crazy, with high market sentiment and explosive trading volume, various altcoins and meme coins surge one after another. At this time, many people around who do not understand cryptocurrency will come in and follow the trend to invest. The operating logic at this time is 'be cautious in chasing highs and take profits promptly'; don't be greedy; securing profits is the way to go. Many retail investors lose back the money they earned during this stage due to greed.
Finally, we are in the early bear market, where the market starts to turn from rising to falling, trading volume gradually shrinks, and many project prices begin to decline. At this time, market sentiment is still relatively optimistic, with many people believing this is just a pullback and continuously buying in. The operating logic at this time is 'decisively stop-loss and clear positions'; do not hold on to any illusions. Many retail investors lose a lot because they did not stop-loss in time during the early bear market.
Some people may ask, 'How can we determine which phase we are currently in?' It's actually quite simple: look at three indicators: trading volume, market sentiment, and valuation levels. If trading volume continues to increase, market sentiment is high, and valuation levels are at historical highs, it is the mid-bull market; if trading volume continues to be sluggish, market sentiment is pessimistic, and valuation levels are at historical lows, it is the late bear market.
To summarize: trading cryptocurrency is not about luck but about understanding and grasping the cycles. If you make the right moves in the correct cycle, you can make money. If you currently feel helpless and confused in trading and want to learn more about cryptocurrency-related knowledge and cutting-edge news, follow me @标哥说币 .
