Today, cryptocurrencies suddenly plunged across the board, with BTC falling more than 15% and ETH falling more than 21% on the day. Many tokens fell directly to the level of December last year.

At this time, countless negative factors are bombarding the market. For example, Buffett liquidated 50% of Apple shares, the reversal of Japan-US arbitrage triggered global liquidation, geopolitical conflicts intensified, and the crypto giant Jump induced on-chain liquidation.

It's not just crypto, the whole world is panicking now. Many readers are worried, confused, and panicking, asking if the bull market is over? Should I buy or sell now? Some people can't control their long positions and see me as a lifeline.

Indeed, the current market is at a very important node, and some decisions must be made at this time. However, our decisions cannot be based on emotional fluctuations caused by ups and downs, but must be based on the system.

The underlying tone of panic and confusion is essentially uncertainty about the unknown. Therefore, when making decisions at the moment, we must think calmly and sort out the confusing clues. Many things are not worth being afraid of.

In March this year, I emphasized very seriously in "Investing is not going to the market in a bull market": If you don't make a nest in the bear market and rush into the bull market, you will end up losing money. This sudden plunge confirms my statement, because the short-term rise and fall of the market cannot be predicted. Most people are constantly losing and making money, and cannot guarantee a daily income of more than ten points. Instead, they will be trapped in a certain plunge because of the high cost of holding positions (or too high leverage).

Therefore, the rise and fall of the market is always unknown to us. If we only focus on short-term rise and fall, we will always be panic and confused and will never be able to make the most correct choice.

Many people would not believe me when I said these words before, because they had already bought coins and made money, and they would sneer at my words. Now please listen more carefully. The following content is divided into two parts, one is the underlying logic, and the other is what to do.

1. The underlying logic of the capital market

1. Cryptocurrency can indeed change the class, but the real benefit comes from the huge increase from the bear market to the bull market. At the same time, this part of the increase is likely to come from BTC and ETH. Why? Because in such an extreme case, everyone’s consensus on BTC\ETH is different from that on other tokens. For the former, everyone is worried about where the bottom is, not whether it will rise again. For other tokens, the worry directly becomes "Will it return to zero?"

Therefore, the ones who dare to hold a heavy position at a low level are most likely Bitcoin and Ethereum, so these two tokens are the ones that can really get big results.

2. The ups and downs of the market cannot be predicted. What can turn the unknown into the known is how much money you have and your position allocation plan. No one can accurately escape the top and buy the bottom. The essence is that it is impossible to predict the rise and fall. Even if you guess right once, path dependence will make you make the same judgment next time. In the end, you will always be trapped or sell too early in a certain escape or buy.

Therefore, it is most important to build positions and reduce holdings in batches. You must ensure that you lose less, and then think about making more.

3. Profit and loss are from the same source. Where you earn, you will lose. Therefore, you should choose the target that can rise the most in the long run. Many people make a lot of money on contracts, local dogs, and swing trading, but most of them are lost here. The core of the bottom layer is still unable to judge the rise and fall of the market. It is not the organizer of various plates. There is no way to know so much inside information. You can only rely on a 50% probability to bet on the rise and fall.

Secondly, various small coins lack business logic and rely purely on low circulation, large-scale control, and retail investor sentiment consensus to drive ups and downs, so they can soar quickly and plummet quickly. This is an opportunity unique to immature markets. But it is not solid.

All speculative opportunities should only be considered in addition to holding large positions in Bitcoin and Ethereum, otherwise they will just be temporary fireworks and you will get nothing in the end.

2. What should we do now?

Now, people who are confused and panic can be roughly divided into three categories.

The first category, what should you do if you hold BTC and ETH at high prices? For this type of friends, now is the time to exercise your mentality. What you need to recognize is the mistakes you made in the past, and you were not prepared for the high-level all-in.

You must change your mindset and tell yourself: If you did not start building a position at the bottom of 2022 or 2023, it means that your luck, courage, and cognition are much worse than theirs, and you have to pay for your lessons. This is the risk you should take. If you can withstand it, your position is just a roller coaster ride and will return to the high point next. If you can't figure it out, your position will go down the drain.

If I still have capital, what I should consider is what proportion I should allocate for each subsequent decline to lower my cost.

If you have already invested all in, then just hold on now. The key is how to handle your position when the market goes up in the future, so that you can have a better mentality.

The second category, what should I do if I want to buy altcoins at a high price? There are also two situations. The first one is that I have already invested all my money and have no spare energy to build a position. This part of friends can’t find anyone to help. At the beginning, I entrusted my life to luck, and now I can only believe in luck.

The brakes failed at 150 mph on the highway. What should I do? I can only say good luck and hope you can hit a speed bump. If you are lucky enough to survive, then read all my past articles.

The second type is those who still have money to cover their positions. This type of friends can still be saved, but the positions that can be added are your last chance. Don't think about adding positions to altcoins to lower the average price. It will fall today, and it may fall more tomorrow, or even not rise back.

What you should do is to make a good plan and put the money in BTC and ETH in batches, so that it can become your last safety cushion. At this time, don't ask to make more, but let the BTC and ETH positions help you to recover your capital. After returning to a healthy state, you can ask for better results.

The third category is the short-sellers.

Congratulations, if you are still short now, then you are lucky. You have more choices to complete a better configuration, but short position players are also non-standard.

Each person can bear different risks, has different investment principals, different expected returns, and even different incomes.

The general direction is to make a good fixed investment ratio and allocate positions every time there is a sharp drop. Secondly, ensure that BTC and ETH are held on a large scale. Finally, refuse leverage and contracts.

Summarize.

After all, by now everyone should realize that investing is not about asking others whether the price will rise or fall tomorrow and then gambling on your luck, nor is it about listening to others say where the bull market is going or how much Bitcoin can rise and then choosing how to build a position.

Instead, we need to see clearly and think clearly. We need to see clearly that the ups and downs of the market are not controlled by us, and we need to see clearly where we can make the most money. We need to think clearly about what cards we have in our hands and how to play them at what time.

Under the major negative factors, positive factors are also quietly brewing, such as interest rate cuts, money supply, and ETFs. The underlying principle of investment is that human beings are getting better. What you see and hear now are just turbulence in the long river of history. What they can do is to speed up or slow down the time to reach the end, but they cannot change anything. On the contrary, if you have a clear understanding, every big drop is an opportunity given to you by the market.