The shorter the time period, the harder it is to identify trading opportunities.
There is a saying that everyone is familiar with: the capital market is a voting machine in the short term and a weighing machine in the long term.
In the cryptocurrency world, people want to get rich overnight in this short-term, even unbearable, time period. This is why the cryptocurrency world is difficult to play. The time period is too short. In fact, it is more of a gambling based on luck. What you earn by luck will also be lost by your strength.
Is it so difficult to wait for a good bottom-picking structure?
Generally, there are always one or two opportunities in a year. What is certain? There will be black swans in the cryptocurrency world every year. This is certain. From the big drop in 2018, to the bottoming out in 2019, to 312 in 2020, to 519 in 2021, to FTX in 2022, to Silicon Valley Bank in 2023, and the low-volume volatility bottoming out before the ETF was approved.
Why didn't anyone buy the dip after the crash?
Maybe it’s because of despair. After every market crash, most people feel that this market has no hope. Most people are cutting their losses, and few are buying at the bottom.
In fact, the three most well-known crashes were on September 4, 2017, March 12, 2020, and May 19, 2021.
When everyone is cursing and selling their stocks, what kind of retribution will you receive if you go against human nature and buy at the bottom?
In the week of September 4, 2017, Bitcoin fell to as low as $2,900. If you bought the dip, it would have risen to $20,000 in just three months, nearly 7 times the price. Ethereum rose from $200 to $1,400 in three months, a more than 7-fold increase. The growth of altcoins was also exaggerated.
On March 12, 2020, Bitcoin fell to $3,800. In just over a month, Bitcoin broke through $10,000 again, and nearly rose to $30,000 by the end of the year. A seven-fold increase by the end of the year was as easy as taking something out of a bag. Ethereum fell to $87, and nearly $1,000 by the end of the year, a dozen times easily, and the performance of altcoins was also good.
On May 19, 2021, Bitcoin jumped from 6.5 to 30,000 in one week. If you bought the bottom, Bitcoin would have risen to nearly 70,000 in less than half a year. Ethereum dropped to 1,760 and rose to 4,870 in less than half a year. If you bought it at the bottom, you would have made money.
There is always a clear event or a very good structure to build a position every year, so why do people still lose money?
Because the opportunity only comes once a year, many people cannot wait and need to multiply their money 10 times every day. Ordinary people simply cannot overcome their greed, and all the shortcomings of human nature will be magnified a hundred times by this circle.
You know, we are always the dumbest fools in this market. If we use the method that even fools can make money, the chances of success will be high in this circle with the highest profits.