Regarding Ethereum's decline, the voices of skepticism have become increasingly louder, making it seem like people in the cryptocurrency world are in a state of panic, worrying about what will happen to many altcoins if Ethereum does not recover. Will they cool off?
If I don't understand the blockchain industry, don't understand finance, and can't read the charts, then today I would feel panic and confusion just like most of my friends.
Today, I will explain to everyone with a simple example (not necessarily accurate). Let's assume Ethereum is an egg, which everyone around the world needs to consume daily. The consensus is that it is a food with high nutritional value and cost-effectiveness.
Now there is a landlord who sees that the influx of people in the area is constantly increasing, predicting a large future market for eggs, and thus wants to own more eggs to sell at high prices.
He must first quietly buy a lot of eggs in small amounts and have enough money. Once he has a certain quantity of eggs, he suddenly begins to sell them, and in an instant, there are too many eggs in the market, leading to price cuts, making the originally priced eggs at 1 dollar suddenly drop to 50 cents.
Everyone feels puzzled when comparing, at this point, the landlord has the educated people in the village tell everyone that the chickens have contracted a plague, and eating them will make you sick, which means no one can eat them for some time.
As a result, everyone is afraid to buy chicken, and no one dares to eat eggs. The chickens and eggs in the hands of farmers have nowhere to go and cannot be sold.
This is when the landlord comes out with good intentions, purchasing chickens and eggs from farmers, who are afraid of greater losses and hurriedly sell.
The landlords have collected a large number of chickens and eggs back into the market, which are now in their hands. At this point, they let the educated people tell everyone that experts have confirmed that the plague was a mistake, and from the eggs, they have researched very nutritious components for the human body.
Everyone is eager to buy eggs, and the price of eggs has rapidly changed from 50 cents to 1.5, then to 2, and 2.5.
In this process, has the nutritional value of eggs changed at all? From beginning to end, there has been no change.
The food chain produced by eggs, and the businesses that require eggs as raw materials, have not changed.
What changes are the market's opinions, the controllers of the eggs, and the prices.
This is a very simple truth that everyone understands, but when it comes to the cryptocurrency market, many people find it difficult to do so when they personally dive in.
Because most people's emotions are constantly influenced by prices, they lack a strong foundation, do not understand the underlying technology of blockchain well enough, and cannot read the charts.
So when chasing prices, when eggs drop to 50 cents, people are afraid to buy, and when the price of eggs rises higher and higher, they are afraid they won't be able to buy them, leading to crazy hoarding.
In any market, we need to learn and see through the underlying logic to become an insider.
Tonight at 20:30, the non-farm payroll data will be released. Is it good or bad news? How should we trade? The community's code is ready, leave a message '1' to receive it.
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