Law 1: Rapid Rise and Slow Fall Indicates Accumulation
When the price of a cryptocurrency rises rapidly and falls slowly, it indicates that the market maker is quietly accumulating, preparing for future price increases.
Law 2: Rapid Decline and Slow Rise Indicates Distribution
When the price of a cryptocurrency declines sharply and rises slowly, it means that the market maker is distributing, signaling that the market is about to enter a downward cycle.
Law 3: Volume at the Top and No Volume Key Point
When there is an increase in volume at the top, the price may still have the momentum to continue rising, and there is no need to rush to sell; if there is no volume at the top, it indicates that the upward momentum has been exhausted, and one should exit quickly to avoid risk.
Law 4: Caution in Entering at the Bottom with Volume
If there is an increase in volume only at the bottom, this may just be a brief pause in the downward process, and it is not suitable to buy recklessly; only when there is sustained volume at the bottom, showing that a large amount of capital is flowing in, should one consider entering the market.
Law 5: Trading Cryptocurrency Reflects Market Sentiment
Trading cryptocurrencies is essentially about speculating on market sentiment. Trading volume can reflect market consensus and investor behavior patterns, which dominate the price fluctuations.