Bitcoin has reached a new high again. Should we be fearful or greedy?
First, we can take a look at the weighted rate chart of the long cycle. It is obvious that we are far from a crazy bull market. So how do we grasp the short-term market sentiment? Next, we will look at four methods to detect market sentiment:
The first one is called the Panic Greed Index, which is the consensus of the industry. Where to find this? CoinGlass, just go directly for real-time queries. If this index is below 20, it indicates that the market is too fearful, consider building positions in batches. If it is above 80, it indicates that the market is very greedy, so consider selling in batches.
However, this index has its limitations. In my opinion, this index is suitable for extreme situations, such as a black swan causing a major crash or a bull market causing major craziness. During such times, this index is clear at a glance, and we can follow this index for operations. But you must know that this index is generally lifeless, fluctuating around 50. In 100 days, there may be one day with more unusual fluctuations, presenting buy or sell signals, but the norm is steady as an old dog. Therefore, the use of this indicator is highly limited.
The second option, the second index is relatively better, the RSI index, which is called the Relative Strength Index. This is very direct and very sensitive. We can open AICOIN or Trading View, regardless of whether you use daily, weekly, or hourly K-line levels, you can use the RSI indicator for queries. This RSI indicator is the same. If it's below 20, it indicates market fear; if it’s above 80, it indicates market greed. In short, when the market is fearful, we buy; when the market is greedy, we clear our positions.
The third kind is the unique on-chain gas fee of the crypto industry. Many trades in our industry do not occur on centralized exchanges; they happen on decentralized exchanges (DEX). The higher the gas fee on-chain, the more active the market is. So this indicator can also very intuitively evaluate market sentiment. The real-time query for the gas fee on the Bitcoin chain can be done using mempool.space, and the real-time query for the gas fee on the Ethereum chain can be done using ultrasound.money.
When the gas fee on the Ethereum chain is below 15, it indicates that no one is trading and everyone is inactive. Similarly, when the gas fee on the Bitcoin chain is below 15, it is exactly the same. For example, from June to September 2023, during this period, the gas fee on the Bitcoin chain remained below 15, and inscriptions went to zero; even dogs ignored it, only the dog traders were secretly trading SATS inscriptions. Later, after September, SATS surged on Binance, increasing by 70 times. Now you understand, right? When the gas fee on the chain remains below 15 for a long time, it indicates that the market is very bleak. In bleak times, it's time to start positioning. When is the signal for a peak? That is when the gas fee on the chain remains above 200 for a long time, even reaching up to 500 at one point. This indicates that the market is too crazy at this time. So we need to clear our positions and run, passing the chips to those who are destined.
The fourth kind is something everyone knows, which is trading volume. However, this trading volume may be something you don't know about. Traditional traders know that it refers to the trading volume in centralized exchanges, but our industry also has a term called trading volume in decentralized exchanges. This trading volume in decentralized exchanges can be queried in Dune. It is particularly noted that this Dune can also query the minting quantity of ordinals inscriptions. We open it up and see that this data indicates a recent decline in minting volume, showing that the popularity of inscriptions is fading.
Moreover, in the industry, the trading volume of centralized exchanges checked in CoinGecko shows that the trading volume has long been sluggish, even hitting new lows. This indicates that no one is playing in this industry anymore, and even dog traders find it hard to wash out chips. At this time, it is a good opportunity for us to start building positions and ambushing. If the trading volume suddenly increases, breaking new highs and maintaining a high level, it indicates that new users and funds have stagnated. At this time, if no new players come in to take over, we can consider selling in batches. So this indicator is still very useful. Long-term sluggish trading volume means we should position ourselves; short-term stagnant trading volume means we should run away. Such a clear sentiment indicator.
The above four sentiment indicators can be learned by everyone. If you want to earn money in this Web3 cycle, to grasp market sentiment, we must be precise. Of course, all of this is based on finding the right new opportunities and selecting the right targets. Only then can you buy during downturns and sell at highs; otherwise, if you choose the wrong targets, buying during downturns may lead to permanent downturns.$SOL $ETH $BTC #特斯拉市值重上1万亿美元 #山寨季分析 #BinanceLabs投资BIOProtocol #Solana涨势分析 #大盘的下一步？ 
