🚨 Cryptocurrency is a zero-sum game; technology is just a passing cloud, while capital is the core!

1️⃣ Essence: A zero-sum market, a game of money flowing into pockets.

The core rule of the cryptocurrency market hasn't changed: one person's profit is another person's loss.

Whether it’s a bull market or a bear market doesn’t matter; what truly affects the market is the flow of capital.

2️⃣ The Federal Reserve's easing is not as expected, capital flows to the US dollar.

Reduction in interest rate cuts: The number of rate cuts next year may decrease, indicating that the market's expectations for easing policies have fallen through.

US dollar capital attraction effect: High interest rates attract global funds back to the US dollar, causing the dollar index to soar, and funds are drawn away from other markets (including the cryptocurrency market).

The result is:

Liquidity in the cryptocurrency market decreases: Money leaves the cryptocurrency market, leading to a tightening of funds.

Panic selling emerges: When liquidity is insufficient, once institutions start dumping, panic emotions will further escalate.

3️⃣ Year-end effect: Institutions sell off to lock in profits.

Some institutions (like Sun Yuchen and Meitu) may sell off early due to year-end settlement needs, waiting for lower prices to bottom out:

Result: Market liquidity decreases, further amplifying volatility.

Pipeline effect: Although liquidity is provided (opening the valve), a large outflow of funds occurs midway (institutions cashing out), leading to weakened liquidity at the market's end.

4️⃣ How to cope with the zero-sum game?

Focus on the flow of capital rather than technical indicators:

Technical analysis can easily be dominated by institutions in large capital games; the flow of funds is fundamental.

Avoid panic selling:

Control positions in the short term to reduce the risk of high leverage exposure.

Wait for liquidity to restore before gradually increasing positions, to avoid being cut in panic selling.

Anticipate institutional movements in advance:

Observe the activities of large institutional wallets, especially around year-end or major events, and pay attention to potential dumping signals.

When liquidity is insufficient, do not blindly bottom-fish:

Conclusion: In today's cryptocurrency market, the knife is the flow of capital, and the fish meat is the retail panic. Mastering the rules can lead to fewer mistakes and more profits!