The recent trend in crypto can be described as a 'plummeting fall'.
Open the K-line chart, BTC has experienced a waterfall on the 4-hour level, dropping to a low of 60,000; ETH's daily line is even more tragic, directly plunging to a low of 1,761, setting a new low in months; SOL, as a former star coin, has also been halved from its high, dropping to a minimum of 67 dollars.
Many friends chat and say they bought BTC at 70,000 and ETH at 2,000, and now their mentality has collapsed. They ask me: 'Why is it still falling after dropping so much?'
I want to give an example, an example about supermarket evening discounts. This example is something everyone has probably experienced.
1. The market is a supermarket that 'must clear out daily'.
Imagine there is a large supermarket downstairs from your house. The bread, deli, and seafood in the supermarket are short shelf-life products, and the supermarket's iron rule is: they must be sold out the same day, never overnight.
This is like the crypto market. The leveraged funds, panic selling, and profit-taking in the market are like these 'short shelf-life products'. Due to the liquidation line and stop-loss line, these assets must be transacted on the same day, or even at that moment, and cannot be left for tomorrow.
During the day, the supermarket operates normally (the market fluctuates normally). If business is bad today, and by the time it closes at night, there are still unsold goods, what should be done?
Discounts.
2. 20% off is not the bottom, it's a trap.
At 8 PM, the supermarket announced: 'Deli area 20% off promotion!'
At this moment, many grandparents rushed in. Their thought process is: 'Usually it's at full price, now it's 20% off, so cheap! If I don't buy now, others will grab it, I need to hurry and take more.'
This is subjective bottom fishing.
In the crypto space, this is when BTC drops from 90,000 to 80,000, and ETH drops from 3,000 to 2,500. You think 'it has dropped 20%, it should rebound', so you enter the market.
However, you ignore the supermarket's demand. The supermarket's demand is not to 'sell at a good price', but to 'sell out'.
If the 20% off has been sold for half an hour and there are still many items on the shelf, what should be done?
At 9 PM, the announcement sounded again: 'Deli area 30% off clearance!'
Those who bought at 20% off are instantly trapped. This is the process of ETH dropping from 2,500 to 1,761 and SOL dropping from 120 to 80.
3. The real bottom is the 'processing price' at 10 PM.
The final form of the supermarket's clearance is not discounts, but 'processing'.
At 10 PM, there are only half an hour left before closing. The supermarket manager takes a look at the shelves, and to avoid overnight inventory and to stop losses, he will offer a price: 'Everything 50% off, sell for cash!'
At this moment, it is the true 'market bottom'.
Only those who enter at this time are objectively bottom fishing. They do not look at how much it has fallen; they only see if the supermarket is 'really anxious'.
4. Back to the market: What time is it now?
Take a look at the K-line charts of BTC, ETH, and SOL:
If the trading volume hasn't shrunk, it means they are still desperately unloading.
Support levels are as fragile as paper; they break with a poke.
The moving averages are in a bearish arrangement, with no signs of a stop in the decline.
This indicates that the supermarket is still in the transition phase from 20% off to 30% off.
The people rushing in now are still those 'afraid others will buy and miss out'.
5. Words for traders.
Spot bottom fishing is like buying rice and flour; you can buy a little at 20% off, a little at 30% off, and a little at 40% off. Because spot has no expiration date, you can wait until next year.
But bottom fishing with contracts is absolutely not allowed. Contracts have liquidation lines, just like borrowing money in the supermarket to buy discounted goods, if it doesn't reach the lowest discount, you will be forced to liquidate.
Patience is the most valuable quality in this market.
Don't be afraid of missing out. In the crypto space, opportunities are like discounted goods in a supermarket; there are new ones every day.
The real hunters are always the last to enter. Before the market has completely cleared out and there is a clear 'double bottom' or 'volume reversal', the best action is to sit in the car and watch those anxious people rush to take the bait at the 20% off price.