I warned everyone the market might need to adjust the day before yesterday, and the result was that Bitcoin really plummeted, with nearly 300,000 people being forcibly liquidated, it's tragic!
The main reasons for this plunge are twofold:
One reason is that the Fed's interest rate cut plan for next year is not strong enough, causing the US stock market to follow suit, and Bitcoin was also dragged down;
Another reason is that Fed Chairman Powell said they won't buy Bitcoin and don't wish to change the law.
But I think these two issues are temporary, and the market will digest them after a while.
Returning to today's daily $BTC market analysis, looking at the K-line, the 1-hour level is down, the 4-hour level is down, the 12-hour level is down, the daily level is down, with an intraday resistance level at 99,000 and a support level at 94,000 USD. Note that 95,000 is a crucial position!!
'Continuous decline? It's the perfect opportunity to buy the dip! How to accurately position yourself when prices are low in the crypto space and make a fortune!'
The sharper the drop, the more you buy in: this is essentially betting on a rebound opportunity. It's a strategy of buying more assets when the market is down. The underlying idea behind this strategy is: if you believe in the long-term value growth of a certain cryptocurrency, then buying when the price drops is actually an opportunity for 'buy low, sell high'. However, in practice, this strategy has both potential and risks, and multiple factors need to be considered in decision-making.
1. Market Sentiment and Volatility
The volatility of the cryptocurrency market is very high, and sharp price fluctuations are sometimes closely related to market sentiment and short-term events. For example, a sudden deterioration in market sentiment could be caused by news events, government regulations, hacker attacks, or project failures, leading to a price crash. If the price drop is merely a short-term emotional reaction and the fundamentals of the project have not changed, then buying at this time could be a good opportunity.
However, if the reason for the price crash is due to fundamental changes in the cryptocurrency's fundamentals (such as project failure or technical issues), then buying during the decline may only be a 'failed dip-buying' which ultimately results in bigger losses. Mindlessly buying into a worthless coin is like having your teeth broken and having to swallow!!
2. Fundamental Analysis
'Buying the dip' strategy only applies to those projects that one has confidence in and understands. After a thorough analysis of the cryptocurrency's fundamentals, understanding its underlying team, technology, application scenarios, community support, etc., a solid fundamental can support long-term value growth.
- Team Background: Does the project development team have rich experience? Do they have execution ability and innovation capacity?
- Technical Feasibility: Is the technology of the project reliable? Are there practical application scenarios? For example, some projects may show excellent short-term performance but may not have actual technical feasibility.
- Market Demand: Does this cryptocurrency have widespread market demand? Can it solve real problems rather than just being a concept hype?
- Community Support: An active community often provides sustained support and development momentum for the project. If a project's community support is weak, it may become even more vulnerable when prices decline.
3. Capital Management and Risk Control
The 'buying the dip' strategy requires sufficient capital and risk tolerance. Although this strategy seems to allow you to acquire more assets when prices fall, if the market continues to decline or the decline lasts too long, you may face severe losses. To control risk, capital management is crucial.
- Gradual Buying: Rather than investing all funds at once, we can buy in gradually. This approach can avoid investment risks caused by excessive short-term market fluctuations.
- Set Stop Loss: Set a clear stop-loss point, and if the market falls below a certain predetermined price, exit in a timely manner to avoid further losses.
- Maintain sufficient cash flow: Don't invest all funds into a single asset; maintaining a certain level of cash flow allows you greater flexibility when the market rebounds.
4. Patience and Time Perspective
The volatility of the crypto space makes it difficult to predict prices in the short term, and many times returns cannot be seen immediately. Investors must possess a long-term perspective and patience. Sometimes, the market may continue to decline in the short term or consolidate for a period, but in the long term, the fundamentals of certain projects may still drive them to grow upward.
For example, established cryptocurrencies like $BTC and $ETH may experience significant volatility during certain periods, but due to strong support from their technology and market demand (recognized worldwide and held by institutions), holding them for the long term may yield good returns.
5. Judging Market Bottoms
Determining whether the market has hit the 'bottom' is not easy. Most investors tend to panic during market declines, believing prices will continue to fall, thus missing the best buying opportunities. In reality, market bottoms often appear when market sentiment is most pessimistic, and rebounds at this time can be very rapid and fierce. Therefore, accurately judging the market bottom is very difficult, and blindly pursuing the bottom may lead to missing other better opportunities.
A common approach is to use technical analysis (such as support levels, trend lines, relative strength index, etc.) to find buying opportunities, but these tools are not 100% accurate and are more of a reference.
6. Market Cycles
The cryptocurrency market typically follows certain cycles, usually consisting of bull markets, bear markets, and consolidation periods. Understanding market cycles can help you better judge whether to 'buy the dip'.
- Bull Market: The market is in an upward state, and most projects' prices perform well, with investors generally optimistic.
- Bear Market: The market is in a long-term downward trend, with prices generally falling and investor sentiment being pessimistic. At this time, 'buying the dip' may bring long-term gains, but it also faces significant risks.
- Consolidation Period: The market is neither obviously rising nor falling, and price fluctuations are small. At this time, the timing for buying needs to be more cautious, usually waiting for a clear market trend direction.
Pepe believes that 'buying the dip' is a high-risk, high-reward strategy in the crypto space, but it is not suitable for all investors and all market conditions. You need to understand and research the fundamentals of the target asset, manage risks well, maintain sufficient patience, and avoid blindly chasing price increases or panic selling. Most importantly, there must be clear investment goals and strategies, and be prepared for possible fluctuations.
Stabilizing while picking up passengers, even the Trump family is stuck!
Market volatility has made many panic, but look at the Trump family's operations—90% of their funds are heavily invested in Ethereum, and even when stuck, they dared to buy more during the big drop yesterday! This is not something an ordinary player can have the courage to do.
Why not panic?
1️⃣ Big players accompany you in being stuck
Not only ordinary people are stuck, but one of the most powerful people in the world is too. Following the Trump family being stuck, this is an opportunity for you to stand shoulder to shoulder with top capital for a lifetime!
2️⃣ Cultivation and Determination
The Trump family buying coins during a big drop shows they are still very confident about the future market. At this time, picking up passengers and stabilizing the mindset is the highest realm of a retail investor's cultivation.
Summary:
Being stuck is not scary, with the Trump family accompanying you, who fears short-term market fluctuations? After a while, those who shout orders on their phones might just be these 'buying the dip' people!
Finally, let me ask you a question,
Do you think the bull market in the crypto space is still there!??
