How to determine when the market will pull back and the extent of the pullback?
This requires us to closely monitor the overall market trend as well as key indicators such as the Fear and Greed Index.
Currently, the Fear and Greed Index is approaching a high of 80. Historically, whenever this index exceeds 80, Bitcoin tends to experience at least a 20% drop within two weeks.
Of course, this is just a historical reference and cannot serve as an absolute predictive basis.
In addition to the Fear and Greed Index, we also need to pay attention to international market dynamics, especially the economic data and policy direction of the United States.
This Tuesday's economic situation in the U.S. will be an important observation point.
If the market can maintain its current gains, it indicates that market sentiment remains optimistic, and the market trend may be relatively stable. However, if there is significant volatility or a decline in the market, then we need to approach investment risks more cautiously.
Additionally, we need to analyze the market trends from a technical perspective.
For example, recently there has been a gap in CME's Bitcoin contracts, but this gap has not been accompanied by a significant pattern breakout; it has only formed a small platform over the past three days.
From a personal perspective, this gap is more likely to be a continuation gap, indicating a sustained upward trend.
The support strength of this gap is quite strong, and the probability of a complete fill is low.
Therefore, we can view it as an important support range ($78,000 - $80,000).
At the same time, we should also pay attention to the trading volume throughout the day.
The larger the trading volume, the higher the market's trading activity, and the stronger the support strength of the gap.
In the short term, if the market experiences a slight correction and returns to the aforementioned support range, it may be a good time to increase purchases.
Of course, this requires us to make reasonable decisions based on our risk tolerance and investment strategy.
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