When trading digital currencies or any financial product, whether holding spot directly or using leveraged contracts to amplify operations, there are some key trading observations worth keeping in mind:
1. Volume shrinkage bottoms out: When market trading volume decreases significantly and prices fall, this often means that selling pressure gradually weakens, which may be a signal that the market is about to form a bottom.
2. Increase the volume and reduce positions: On the contrary, if the trading volume increases significantly and the price rises rapidly, this is usually a sign of rising market enthusiasm and the concentrated release of multiple forces, but it may also indicate the formation of a short-term top, which is the time to consider reducing positions or shipping. .
3. Violent fluctuations are tests: The market experiences sharp rises and falls in a short period of time. This is often the result of intense games between long and short parties. It is more often a test of the market's support and resistance levels rather than the establishment of a trend.
4. The secret behind the rapid rise and slow fall: The price rises rapidly and then turns to a slow fall. This trend may imply that the selling pressure from above is heavy and the power of many parties is gradually exhausted, which is a sign that funds may be quietly withdrawing.
5. Extremely rapid decline and rebound: Sharp price declines in a short period of time are often caused by panic selling in the market, but overreaction is often followed by a rebound, providing investors with opportunities to intervene at dips.
6. Be careful with rocket-like rises: Although prices soar like rockets, although they may seem attractive, they are often difficult to sustain and lack solid fundamental support. A correction or reversal is likely to follow. Investors should remain calm and be wary of risks. .
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