Letâs face itâmany newcomers in the crypto world fall into the same trap, but after reading this, you'll avoid making those costly mistakes. One common question often arises:
"How does the market sustain its liquidity? If profits are constantly being taken, why doesn't the market ever run dry?"
Hereâs the truth: poorly planned trades, especially those with high leverage and no risk management, are the lifeblood of the market. Prices rise when demand surges and fall when demand weakens. Itâs all about the inflow and outflow of capital.
For example, imagine one million traders enter a market simultaneously. On average, most contribute $50, but you decide to start with just $10. Collectively, this injects $50 million into the market. Now, consider this: only 5% of these traders profit, withdrawing an average of $100 each, which totals $5 million. Meanwhile, the other 95% lose their trades, leaving $47.5 million in the market. Even after accounting for profits, thereâs still $42.5 million circulating to maintain market stability.
When you feel like the market is working against you, take a step back and consider the bigger picture. The market thrives on this cycle, and understanding these dynamics will give you a stronger grasp of how the economy within the crypto space truly operates.
THE SECRET INDICATORS YOUâVE OVERLOOKEDđĽđĽđ¨
Thereâs a powerful trading tool hiding in plain sightâsomething you see daily but havenât fully understood. Ready to uncover it? Follow these steps:
1. Check the heatmap: Identify tokens with the highest and lowest percentage changes. Focus on the top 5 gainers and losers.
2. Explore Binance Square (or similar platforms): Find the most discussed tokens and cross-check them with your list.
3. Analyze impulsive waves: Measure the total percentage gain or loss from the initial surge or dip to the latest significant move.
The key indicator is the percentage gained or lostâ10%, 20%, 50%, or even 80%. When a token rises by more than 9%, retracements are likely, creating opportunities for short positions, especially when it nears an 80% surge (rare in bearish markets). Conversely, when a token dips by more than 9%, retracements are also probable, signaling potential long positions, particularly if it approaches an 80% decline (uncommon in bullish markets).
This strategy provides a calculated approach to trading in volatile markets. Keep it in mind as you navigate your trading journey.
Final Thoughtđ¸đđŻ
The crypto market can be intimidating for newcomers, but with knowledge, discipline, and the right tools, you can transform the chaos into opportunity. Stay cautious, think strategically, and always prioritize risk management.
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