I. Anchor to market indicators
Bitcoin serves as the 'anchor' of the cryptocurrency market, and its price movements have a profound impact on the entire ecosystem. Although Ethereum occasionally has independent trends, most altcoins tend to follow the rise and fall of Bitcoin. Therefore, keeping an eye on Bitcoin's dynamics is like grasping the pulse of the market, helping us to anticipate overall trends.
II. Understand the seesaw effect between stablecoins and mainstream coins
There is a subtle inverse correlation between Bitcoin and USDT. When the price of USDT rises, it indicates an increase in market risk aversion, which may put pressure on Bitcoin's price; conversely, when Bitcoin's price is rising, it is often a good time to convert profits into USDT and lock in gains. Understanding this pattern can give us a head start in asset allocation.
III. Skillfully use the late-night trading window
From midnight to 1 AM every day, market liquidity is relatively low, making it easy to experience 'pinning' phenomena with sharp price fluctuations. Domestic investors might consider setting up smart orders before bed, placing buy orders below market price and sell orders above market price, utilizing market volatility for automated trading; who knows, they might wake up to unexpected surprises.
IV. Morning price fluctuation prediction technique
From 6 AM to 8 AM is an important decision-making moment. If from midnight to this time, the price continues to decline, and this trend persists, then the probability of a rebound that day is relatively high, making it suitable for buying on dips or replenishing positions; if prices continue to rise, choosing to lock in profits at this time can often avoid subsequent correction risks.
V. Keep a close eye on afternoon volatility nodes
At 5 PM, due to time zone differences, American investors begin to be active, increasing market liquidity and often triggering significant price fluctuations. During this period, whether prices rise or fall, it may present trading opportunities, thus requiring close attention to market changes.
VI. Rationally view 'Black Friday'
'Black Friday' in the cryptocurrency circle is not absolute; Friday's market performance can see significant drops, rises, or sideways fluctuations. Instead of blindly panicking or speculating, it is better to closely monitor policy, industry, and other news dynamics, and formulate trading strategies based on actual conditions.
VII. Scientifically respond to short-term declines
For cryptocurrencies with a certain level of market activity, short-term declines should not cause panic. If the fundamentals remain unchanged, patiently holding often leads to price recovery, which can take a few days to several months. Investors with extra funds may also adopt a batch replenishment strategy to lower holding costs and accelerate the process of getting back to break-even. However, if it is a 'air coin' lacking real value, timely stop-loss is necessary.
VIII. Adhere to long-term value investing
Frequent trading in spot transactions not only increases transaction costs but also risks missing long-term gains due to short-term fluctuations. Instead of chasing rises and selling on dips, it is better to choose quality coins for long-term holding, trading time for space, which tests the investor's patience and determination.
IX. Pay attention to macro and industry dynamics
The cryptocurrency market is easily impacted by external factors. Regulatory policies on digital currencies from various countries, adjustments to U.S. monetary policy, and even statements from industry leaders can trigger significant market turbulence. Developing the habit of daily attention to financial news and industry dynamics is essential for risk prevention and opportunity capturing.
X. Cultivate a strong trading mindset
In the cryptocurrency circle, mindset determines success or failure. When facing price drops, one must remain calm and avoid blind losses; during significant increases, one should also not be greedy and should take profits promptly. Only by maintaining a calm and rational mindset can one make correct decisions in a rapidly changing market.
The above summarizes the key points of cryptocurrency trading from multiple perspectives. If you wish to delve deeper into any specific point or have other trading confusions, feel free to reach out to me.
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