After a sudden drop, it has recovered at a low level; risk management comes first, do not catch the bottom.
The current cryptocurrency market has entered a low-level recovery phase after a rapid drop in the early morning. BTC is oscillating around $87,500, experiencing a slight rebound during the day but still down over 3% from the previous high. ETH has rebounded to around $2,870, with a weekly decline exceeding 14%. Market volume has increased alongside the drop, and panic sentiment has not completely eased.
Key Influencing Factors
Macro and Geopolitics: The tense geopolitical situation between the US and Iran has triggered a global flight to safety, with capital moving away from high-risk assets towards traditional safe-haven assets like gold. This, combined with cooling expectations for interest rate cuts from the Federal Reserve and the risk of a US government shutdown, further suppresses the risk appetite in the cryptocurrency market.
Market sentiment: The Crypto Fear and Greed Index has fallen to 20, entering the extreme fear zone. Panic selling by investors has triggered short-term capital outflows, with over 200,000 people liquidated across the network in 24 hours. Leveraged positions have amplified price fluctuations.
Capital flow: The BTC spot ETF has seen net outflows, leading to continued selling pressure. Institutional capital is in a strong wait-and-see mood, with short-term capital in the crypto market flowing out. Mainstream coins lack incremental capital support, making it difficult to form an effective rebound.
Neutral view on mainstream coins/sector.
BTC is currently in a technical recovery phase after probing the bottom. The upper resistance at $88000-$88500 is key and challenging to reclaim, while the core support level is at $86000-$86500. A breach could open further downward space, and the overall oscillation remains bearish; ETH's performance is weaker than BTC, with $2800-$2820 as short-term support and $2900 showing significant pressure. There is a lack of independent market drivers, primarily relying on the broader market's recovery. Smaller coins are more heavily impacted by the broader market's decline, and some short-term anomalies lack sustained capital support, making participation for newcomers extremely risky.
Executable suggestions for newcomers.
Position management: Strictly maintain light positions or even remain in cash. The position in mainstream coins should not exceed 30%. Hold the remaining funds firmly in stablecoins, and resolutely avoid blind bottom-fishing or engaging with any leverage and contracts.
Operating strategy: Pause all dollar-cost averaging and buying operations. Those holding positions should not chase small rebounds at low levels. If the unrealized losses are too large, do not panic sell; wait for market stabilization signals.
Stop-loss and take-profit: Set the stop-loss for BTC at $86000 and for ETH at $2780. If the core support levels are effectively breached, exit decisively to avoid greater risks; if not breached, remain patient and observe without taking action.
Information sources: Only focus on official announcements from exchanges and authoritative data platforms like Glassnode. Ignore bottom-fishing calls and price predictions within the community to avoid being swayed by panic sentiment.