How to Identify a True Golden Pit in a Sharp Decline
True and False Sharp Decline Identification System
1. Death Spiral Characteristics:
Average Daily Decline < 3%
Volume Continues to Shrink
Rebound Does Not Exceed Previous High
(Typical Case: Before the 2022 LUNA Crash)
2. Golden Sharp Drop Signals:
Single Day Decline > 15%
Trading Volume Increases by 200%+
Appearance of Long Lower Shadow
(Typical Case: BTC Rebound After the March 2023 Banking Crisis)
Volume Analysis Three-Dimensional Model
1. Major Player Selling Volume:
Slowly Increasing Volume Drop
Each Wave of Rebound Volume Decreases
Net Inflow to Exchange Continues
2. Panic Selling Volume:
15-Minute Liquidation Volume > 3 Times Daily Average
USDT Premium > 1.5%
On-Chain Whales Increase Holdings
Precise Bottom-Fishing Timing Table
Time Window Operation Strategy Success Rate
First Wave Sharp Decline Wait and See 38%
Second Bottom Exploration Light Position Trial Order 65%
Volume Recovery Heavy Position Attack 82%
2024 Practical Toolbox
1. Bottom-Fishing Trio:
Monitoring Large Purchases on Exchanges
Contract Funding Rate Reversal Alarm
Stablecoin Market Value Change Tracking
2. Position Allocation Formula:
First Position = (Principal × 2%) / (Volatility × 3)
Example: 100,000 Principal, Volatility 8%
= (100,000 × 0.02) / (0.08 × 3) = 8,333
Classic Battle Review
1. Successful Case (2023.10):
ETH Sharp Drop to 1,520 (-18%)
Trading Volume Expanded to 3 Times
Rebounded to 1,680 (+10.5%) within 24 hours
2. Failed Case (2024.1):
SOL Continuous Decline for 7 Days (-32%)
Volume Continues to Shrink
Subsequently Declined by 55%
Ultimate Defense Rules
1. Three No Principles:
Do Not Catch Falling Knives
Do Not Bottom-Fish Without Volume
Do Not Believe 'This Time Is Different'
2. Safe Bottom-Fishing Process:
① Confirm Volume Spike and Sharp Drop
② Wait for 1 Hour K-line to Stabilize
③ First Position ≤ 3%
④ Rebound 3% to Add 2%
Based on On-Chain Data:
1. Recent Sharp Drop Qualification Rate Only 23%
2. Suggest Keeping 70% Cash
3. Set Price Alert Range
Remember:
In the Currency Circle, Choice is Greater than Effort!
Follow the Right People, Making Money Will Be Natural!
Like + Follow Longmen = Open the Door to Wealth!
