In the cryptocurrency market, major players profit through accumulation and distribution, and during this process, on-chain holding behaviors inevitably change. The core of trading strategy lies in how to capture the behavioral patterns of major players through data. For example, during accumulation, major players exhibit specific on-chain behaviors that can be aggregated and transformed into trading signals.
However, when more people adopt similar strategies, major players may adjust their strategies or even conceal their behaviors. Therefore, the effectiveness of trading strategies needs to be continuously adjusted and optimized to identify potential hidden behaviors of major players; this is an ongoing game.
Focus on opportunities for capital rotation in the market.
The cyclical changes in the cryptocurrency market have a significant impact on the execution of trading strategies. From a macro perspective, the focus of capital varies over different periods.
Mainstream coin rotation: Capital may concentrate on mainstream assets such as BTC and ETH, leading to a lack of on-chain liquidity and lower trading volumes.
Emerging public chains and hotspot switching: Ecological hotspots will switch among public chains, such as the recent transition from ETH to Base, BSC, and then to Solana. Solana, due to its high TPS and low gas fees, has become a breeding ground for high-frequency trading and innovative projects.
Meme track and narrative shift: In more segmented tracks, such as meme tokens, capital can also rotate due to updates from launchpads or changes in narratives. For instance, the focus of market funds continuously shifts from Solana's high-frequency PVP market to new projects on the Base chain.
Real-time monitoring of on-chain transaction volume and capital flow to assist decision-making. For example, recent capital rotation indicates that the virtual economy on emerging chains (such as AI Agent and Virtuals) has become a hotspot, suggesting the need to adjust positions in a timely manner and follow the flow of funds.
Always have your own trading strategy.
A bull market provides many opportunities but also comes with high risks. In such a market, staying calm is especially important.
Independent judgment: Trading should be centered on validating strategies rather than catering to market sentiment. Emotional fluctuations in a bull market can easily lead traders to be misled by the 'eternal bull market' narrative, resulting in excessive optimism.
Take profits in a timely manner: A major pitfall in a bull market is 'reluctance to sell.' Even if the market rises, realizing some profits is key to maintaining a long-term advantage. Even if higher price points are missed, controlling risk always takes precedence over chasing higher returns.
Support for stable cash flow: Cash flow is the anchor for calm trading. Obtaining stable cash flow through main business or quantitative funds can reduce reliance on short-term market fluctuations, making trading more composed.
In a bull market, traders often face anxiety, fearing missed opportunities, underwhelming returns, and psychological fluctuations caused by short-term pullbacks.
In response to this, there should also be corresponding coping strategies:
Focus on the trading framework: Trading outside the framework, even if profitable, is not regarded as successful. The core of trading is validating strategies and refining understanding, rather than temporary gains.
Establish a calm communication environment: Avoid being disturbed by emotional signals and maintain communication with calm and rational trading partners. Especially in a bull market, overheated emotions can easily lead to irrational decisions.
Remember the cyclical nature of the market: A bull market is not 'eternal' but a cycle of opportunity and risk. Even with strong bullish sentiment, it is essential to remain vigilant against risks, especially when only a single narrative appears in the market without clear supporting logic.
Although Bitcoin enjoys the title of 'digital gold,' it always harbors high risks. Whether one can seize opportunities and smile at the next wave of bullish momentum depends on the grasp of market pulses. I hope everyone can achieve substantial profits in the new year.
Remember to take profits in a timely manner; the real 'altcoin boom' will come after Bitcoin peaks, but it is essential to exit the market before the end of 2025, as 2026 may usher in a bear market, with coin prices potentially dropping by 80% to 90%.