One day in the crypto space is equivalent to a year in the stock market—this is not entirely exaggerated. In this brand new financial world, the only limit is one's imagination. The market operates 24/7, and your heart must be strong, with nerves constantly on edge because even the slightest market movement can lead to a price increase of several thousand times in a month...
I have always disapproved of young people trading cryptocurrencies, not because of the risk but because of the return rates. The overnight thousand-fold or ten-thousand-fold appreciation constantly stimulates the increasingly restless nerves of the masses, causing too many people to lose their life goals. Everyone talks about blockchain as if it were another symbol of the UAE, Singapore, Hong Kong, Tokyo, or New York, filled with countless greedy dreams—hoping to get rich overnight.
There are many myths here, such as Li Xiaolai, Bao Er Ye, and the miraculous girl. Many big names gather here, and BAT have all entered the game.
"If it didn't rise by several hundred times, don't say you bought it." This is a phrase a friend often reminds me of. The myth of getting rich easily can easily lead people astray.
Today, I want to recommend three relatively low-risk strategies that won't make you rich overnight but offer stable returns, high return rates, and low thresholds, suitable for both new and old players.
One, Arbitrage
Ways to make money in the crypto space, besides the well-known trading, mining, and cutting leeks... there is also a group of people quietly making big profits.
They are the true speculators in the crypto space, known as the 'fighters among speculators.' Domestic policies are strictly controlled, cryptocurrency prices plummet, and while many people lament, this group is dancing with joy, making a fortune.
They are the hermits of the crypto space—the 'arbitrage army.'
The essence of arbitrage is very simple: utilizing the price differences between different currency trading platforms to buy low and sell high, or sell high and buy low, in order to profit from the price difference.
In September of last year, many veterans of the crypto space felt it was a nightmare. On September 4, the central bank clearly stated that ICOs were illegal, and on September 14, regulators demanded the closure of domestic Bitcoin exchanges. Under these heavy blows, Bitcoin's price plummeted rapidly.
The price of Bitcoin in the exchange fell to 18,000 yuan in China, while in overseas exchanges, it was 23,000 yuan. Each time the exchange generates a huge price difference, it is seen as a godsend opportunity by the arbitrage army. When volatility occurs, it is their time to strike.
A friend involved in arbitrage told me: 'I work with several friends in South Korea; we buy in China and sell at Korean exchanges. Our profit is just 2%; we invested 2 million and only made about 40,000 in one go.'
After 40 such operations, earning nearly 1.6 million, he stopped. Due to national regulations on personal foreign exchange, every time he transferred money to overseas exchanges, he could only do so through underground banks. This posed a huge risk; if he was targeted by regulators, his account would be frozen, and his principal would be lost.
Apart from account freezes, arbitrage also faces other risks.
Therefore, apart from 'solo operations,' there are many professional arbitrage teams with clearly defined roles. Software developers, traders, and financial personnel all have their specific duties.
The arbitrage army has evolved through four stages:
1. Original Stage: Bitcoin has price differences across platforms, the most primitive way of arbitrage is to buy at a low price and sell at a high price.
Issues exist: the turnover rate is very low, exchanges manipulate coins quickly, but transferring money is too slow. When you frequently transfer using fiat currency, there's also the problem of explaining to the bank what you're doing.
2. Coin-to-Coin Trading Stage: To solve speed issues, convert all to other coins, avoiding fiat currency transactions.
However, issues still exist: it’s still not fast enough. In the crypto space, opportunities can be fleeting.
3. Initial Hedge Stage: You can place some cryptocurrencies (e.g., USDT) on each platform; sell where the price is high on one platform: buy an equal amount of coins on another platform, and after a while when the price on the other platform is high, sell there, then buy again, always maintaining equal positions on both sides.
Existing problems: Cryptocurrency prices fluctuate; in December last year, Bitcoin dropped from 20,000 USD to over 6,000 USD, which is a significant risk.
4. Advanced Hedge Stage: After trading in the traditional arbitrage market, hedge in the futures market so that regardless of its rise or fall, you earn from the price difference due to its volatility.
Two, Sheep-Shearing in the Crypto Space
In November 2017, a project called Mi Xin promoted that registering and inviting other users to download the DAPP would earn token rewards. This project had a six-level referral system, meaning you could earn rewards from everyone invited down to six levels.
At that time, the price of a certain cryptocurrency was around 2.2 ETH, reaching a peak of 18,000 yuan. Many people managed to harvest 10 coins, selling them when the price exceeded 10,000 yuan. Airdrop coins can either make you rich or leave you with nothing.
Many people, when they first start shearing sheep, are almost walking around brushing various sheep-shearing information. In terms of quantity, there might be millions worth of coins in their wallets, but in terms of value, these coins are currently worthless.
In addition, registering through personal information such as mobile phones or email to obtain airdrop coins also carries risks. Accurate personal information in the crypto space can sell for at least ten dollars on the black market, and just selling personal information can be hugely profitable.
In addition, many project teams build communities by distributing worthless tokens and then promote other projects. In this process, while the sheep-shearing party does not suffer property losses, they become tools for others to make money.
You can't get the wolf without letting go of the child; no return comes without a price. Just like shearing sheep, 'while you're shearing sheep, someone may be shearing you.'
Three, Selective Investment
Everyone wants to buy low and sell high. Just look at Bitcoin's trend chart and imagine what your situation would be if you had fully invested at a low point and sold at a high point. Wouldn't it be like winning the lottery?!
Many people start without familiar guidance, knowing nothing but to buy big coins like BTC, ETH, ECH, EOS... Little do they know, these large coins currently have no advantages in appreciation speed or price. Unless you are a big player preparing substantial funds for long-term holding, I do not recommend blindly buying.
Moreover, these coins, due to a high number of transactions, are the main targets for large funds and institutions to pump and dump, making it difficult for retail investors to escape being harvested.
If we view the entire cryptocurrency market as a whole, and the overall market share of cryptocurrencies continues to increase.
What is the opportunity for the rise in market value? It is certainly not driven solely by one cryptocurrency, but rather by multiple cryptocurrencies. The best way to safely capture the overall growth of cryptocurrencies is to diversify and gain profit from multiple coins.
In addition, there's an interesting fact: from January 2016 to January 2018, Corgicoin rose 60,000 times, while Verge rose 13,000 times.
During the same period, Bitcoin only rose by 34 times. While you may gain substantial returns from Bitcoin, expanding into other coins could significantly increase your potential profit.
Therefore, as a newcomer, investing in smaller coins is a wiser choice. When they are first issued, many people cannot see their value, but they are favorites of seasoned investors who specifically invest in these new coins, waiting for them to open for trading before selling for a small profit.
More experienced players will also use their own judgment based on experience; for instance, some coins with strong team backgrounds, project visions, and technical strengths are suitable for medium to long-term investment. Their value doubling will surely surprise you. BNB is a good example of a cryptocurrency to hold long-term.
Recently, it dropped by 20% at one point. I witnessed some people selling it to protect their investment; however, a week later, it nearly tripled in value. GPA is also a good choice, with positive momentum in various project aspects, and the private placement price was favorable, expecting a good market when it opens.
Speaking of GPA, one cannot ignore the information gap in the crypto space. Why are some people always cutting leeks while others are always being cut? Simply put, it is caused by the information gap.
Big players have a better grasp of information; they have more channels to obtain information compared to ordinary players, or they are better at filtering and discerning information, able to distinguish the impacts of policies, economic conditions, and industry trends on the crypto space.
Therefore, they find it easier to accurately grasp the timing of entering and exiting, while newcomers have relatively closed information. When they see a coin with a promising trend and prepare to enter, the big players are already ready to harvest. Thus, timely access to information is crucial, especially private placement information, as the prices are low enough and the potential for doubling is significant, making it a case of small investment with high returns.
The arbitrage team has developed through four stages:
I believe many people only learned about this coin after hearing about its 50-fold increase; entering the market at that time leaves much less profit margin. Thus, your information lag directly affects your investment returns.
If you are also a tech enthusiast and are quietly researching technical operations in the crypto space, consider following the official account (Trend Judgment) to receive the latest crypto intelligence and trading skills!
Everyone comes to the crypto space with the same intention, and there’s no doubt about it. If you are just here to play around and pass the time, then this is not the right place for you.
I think you need to quickly grasp the terms I listed below; otherwise, it will be difficult to enter the圈.
The image below is a Web3 ecosystem mind map I summarized over two weeks, covering all sectors and leading applications in the crypto space. Save it and take your time to study it.
At this point, you should give me a follow...
When encountering these 7 types of 'bottom formations' in trading, act immediately; the main upward wave is about to emerge!
One, Double Peak Reversal
The double peak reversal refers to the formation of two wave peaks at the top or bottom of the price, known as double tops and double bottoms, commonly referred to as 'M' and 'W' type reversals.
A double peak reversal pattern does not necessarily mean a price reversal; it may also rise due to support from a support line as the price falls back to the neckline. At this time, the price moves within the area between the support line and the previous two peaks, forming various patterns such as triple tops and triangles, but this possibility is small.
The greater the distance between the two peaks, meaning the longer the formation of the two tops and bottoms lasts, the greater the potential for a double top reversal in the future, and the more volatile the fluctuations after the reversal will be. The rise (or fall) after the breakout of the double peak pattern is 1 to 3 times the height of the neckline of the pattern itself.
Two, Head and Shoulders Top
This is a long-term trend reversal pattern that usually appears at the end of a bull market.
The head and shoulders reversal pattern appears a total of three peaks, with the middle peak being higher than the other two, hence called the head. The left and right peaks are lower, referred to as the shoulders.
When the neckline of the head and shoulders top is broken, it is a true sell signal; although the price has fallen significantly compared to the highest point, the downward trend has just begun, and investors who have not yet sold should continue to sell.
After the neckline is broken, we can predict the price level it will fall to based on the minimum drop measurement method for this pattern. This method involves drawing a vertical line from the highest point of the head to the neckline, and then measuring downwards from the point where the right shoulder breaks the neckline by the same length; the measured price will be the minimum drop of the stock.
Example:
For example, I previously registered for FI, with a private placement price of 6 cents, and it directly rose to 3 yuan within two days of opening, yielding a 50-fold increase. Short cycle, high return; the key is finding information.
[The blue circle is a reference sell signal]
Three, Head and Shoulders Bottom
(1) The shapes of head and shoulders tops and bottoms are quite similar.
(2) When the neckline of a head and shoulders bottom is broken, it is a real buy signal. Although the price has risen a certain amount compared to the lowest point, the upward momentum has just begun, and investors who have not yet bought in should continue to chase. The minimum rise can be measured by drawing a vertical line from the lowest point of the head to the neckline, and then measuring upwards from the point where the right shoulder breaks the neckline by the same height; the measured price will be the minimum rise of the stock.
Additionally, when breaking through neckline resistance, there must be a significant increase in transaction volume; otherwise, it may be a false breakout. However, if after the breakout the volume gradually increases, the pattern can still be confirmed.
(3) Generally speaking, the head and shoulders bottom pattern is relatively flat, requiring a longer time to complete.
(4) After breaking the neckline, there may be a temporary retracement, but it should not be below the line. If the retracement goes below the neckline, or if the price falls back at the neckline level and cannot break through the neckline resistance, and also falls below the head, this may indicate a problem.
It is a failed head and shoulders bottom pattern.
(5) The head and shoulders bottom is one of the most predictive patterns; once confirmed, the rise is mostly greater than its minimum rise.
The head and shoulders reversal pattern has many special forms, such as the compound head and shoulders pattern. The analysis methods are the same as for the head and shoulders reversal pattern, and I will list several common forms below for everyone to deepen their impression.
Four, Triple Top (Bottom)
Any head and shoulders type, especially when the head does not significantly exceed the shoulders, can be referred to as a triple top (or bottom) type. The triple top pattern is also very similar to a double top, just with one more peak, and each peak is spaced widely and deeply. The triple bottom is the inverted triple top, and the analysis meaning is the same.
Five, Rounded Bottom (Top)
The price shows a shape of solitary rise. Although it continues to rise, each peak falls back shortly. First, the new peak is higher than the previous point, then the retracement is slightly lower than the previous point; connecting these short-term peaks forms a rounded top. In terms of volume, there will also be a rounded shape.
(1) Sometimes, after a circular head forms, the price does not immediately fall but instead repeatedly develops sideways to form a wandering area, known as a cup handle. Generally speaking, this cup handle will break through quickly, and the price will continue to develop towards the anticipated downward trend.
(2) Circular reversals can occur at both the top and bottom of prices, with similar shapes but opposite meanings.
At the bottom, the price shows a shape of a solitary decline. Initially, the pressure from sellers gradually decreases, leading to a continuous decline in transaction volume, but buyers still hesitate. At this time, although the price is falling, the decline is slow and small, and its trend curve gradually approaches horizontal.
At the bottom, the buying and selling forces reach a balanced state, resulting in very low transaction volume. Then demand begins to increase, and prices rise, ultimately allowing buyers to completely control the market, causing prices to soar dramatically.
In terms of trading volume, it initially decreases slowly to a level, then increases, forming a rounded bottom shape. This pattern indicates that a significant bull market is about to arrive. Investors can enter when the upward momentum of the rounded bottom begins to accelerate.
Six, V-shaped Reversal and Extended V-shaped Reversal
Downward Phase: Typically, the left side of the V shape declines steeply and lasts for a short period.
Turning point: The bottom of the V shape is very sharp, generally forming this turning point in just three or two trading days, and the volume at this low point is significantly increased. Sometimes the turning point appears during panic trading days.
Recovery Phase: Following this, the price rebounds from the low point, and transaction volume increases accordingly.
When the price breaks through the top of the wandering area of the extended V shape, it must be accompanied by an increase in transaction volume; when it breaks below the bottom of the inverted extended V shape, an increase in volume is not necessary.
Pattern Significance:
Due to the strong selling power in the market, prices stabilize and continuously decline. Once this selling pressure disappears, the buying power fully controls the market, leading to a dramatic price rebound, almost recovering all losses at the same speed as the decline; thus, the price movement on the chart forms a V-shaped trajectory.
The inverted V-shaped situation is just the opposite; the optimistic sentiment in the market leads to a gradual price increase. However, a sudden factor reverses the entire trend, causing sellers to drop at the same speed as the price rises, forming an inverted V-shaped trajectory. Typically, this pattern is caused by some unforeseen factors and informed investors.
Seven, Expanding Reversal (Trumpet Type)
The price rises for a period, then falls, then rises again and falls again, with the rising highs higher than the previous highs and the falling lows also lower than the previous lows. The entire pattern starts with narrow fluctuations and then expands both upwards and downwards; if we connect the upper and lower highs and lows, we can draw a mirrored triangle shape, which is the trumpet shape.
In terms of trading volume, the trumpet type maintains high and irregular volume throughout the entire pattern formation process. The trumpet type is divided into rising and falling types, and their meanings are the same.
A standard trumpet type should have three high points and two low points. Each of these three high points is higher than the previous one, while the two low points in between are lower than each other; when the price falls back from the third high point, if its retracement low is lower than the previous low, the formation of the pattern can be assumed. Like the head and shoulders top, the trumpet type belongs to the 'five-point reversal' pattern, so a flatter trumpet type can also be seen as a head and shoulders style trend with a higher right shoulder and a downward sloping neckline.
The trumpet shape is caused by the impulsive and irrational emotions of investors, so it rarely appears at the bottom of a bearish market. This is because after a period of price decline, investment willingness is weak, making it impossible to form this pattern in a low market sentiment.
Playing in the crypto space is essentially a competition between retail investors and institutional players. If you don't have super strong professional skills, you can only be cut down!
