Five Major Laws of Cryptocurrency Trading:

Law One: Rapid Rise and Slow Fall Indicates Accumulation

When the price of a cryptocurrency rises rapidly and falls slowly, it usually indicates that the market makers (or large holders) are quietly accumulating for future price increases.

Law Two: Rapid Fall and Slow Rise Indicates Distribution

When the price of a cryptocurrency falls rapidly and rises slowly, it often signals that market makers are distributing their holdings, suggesting that the market may soon enter a downtrend.

Law Three: Volume at the Top Indicates Potential

If there is an increase in volume at the price peak, it indicates that the market still has upward momentum, and investors need not rush to sell; however, if the trading volume significantly shrinks (low volume), it indicates that the upward momentum has exhausted, and investors should exit quickly to avoid risks.

Law Four: Volume at the Bottom Requires Caution

If there is only an increase in volume at the price bottom, it may just be a brief pause in the downward process, and it is unwise to blindly buy at this time; if trading volume continues to expand, it indicates that capital is actively flowing in, and investors can consider entering the market at an appropriate time.

Law Five: Cryptocurrency Trading Requires Attention to Sentiment and Volume

In the process of trading cryptocurrencies, investors should closely monitor changes in market sentiment and trading volume. When sentiment is high and trading volume increases, it may indicate that the market is quite active; conversely, shrinking volume may signify a lack of market confidence. By combining changes in sentiment and volume, one can more accurately assess market trends.

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