Behind the myth of short-term wealth in the crypto space, how can beginners avoid losing everything?
One, is short-term trading in the crypto space like riding a roller coaster?
Recently, a friend asked me: "Why did Old Wang turn $50,000 into $300,000 in three days, while I followed his strategy and lost everything but my shorts?" This needs to start with the essence of short-term trading in the crypto space—it's essentially a 24-hour global casino, with price fluctuations more thrilling than a roller coaster. Bitcoin just broke $104,000 last week but dropped to $101,000 within 24 hours, a fluctuation equivalent to a regular person’s six-month salary.
Take a look at these astonishing statistics:
On May 10, Bitcoin's daily trading volume exceeded $42 billion, equivalent to Pinduoduo's two-day trading volume
Ethereum's highest price in the last 30 days was $2,550, and the lowest was $2,150, enough to buy a top-spec iPhone
A certain altcoin soared 180% in four hours, then halved in the next half hour
Why is it so thrilling? Three core reasons:
Global capital battle: giants like BlackRock and Grayscale trade in billions of dollars
Leverage amplifies risk: exchanges offer 125x leverage; a 5% fluctuation can lead to liquidation
Characteristics of news-driven markets: a tweet from Trump can rocket the coin price
Two, is technical analysis a mysticism or a science?
"Can you predict price fluctuations just by looking at K-lines?" Sounds a bit mystical, right? Let’s talk with real cases: Case 1: The 'Dark Cloud Cover' pattern. On May 11, Bitcoin showed a long upper shadow at $104,000, and professional trader Li Ying immediately warned of a pullback risk. The next day, it indeed fell to $101,000, and those who stopped loss in time lost only $3,000 per coin. Case 2: Moving Average strategy. Huobi analyst Zhang Lihui suggested buying Ethereum when the price stabilizes above the daily EMA30 (about $2,350), and stopping loss immediately if it falls below. Following this strategy, April's return could reach 38%.
Three, which of the three major factions is more suitable for beginners?
Short-term players in the crypto space can be divided into three categories; let’s break it down: 1. News traders
Advantages: capture sudden market trends, such as a news of BlackRock increasing holdings causing Bitcoin to rise 8% in one hour
Disadvantages: Easy to be cut by false information; in April, a group fabricated SEC documents causing a market flash crash
Essential skills: real-time monitoring from authoritative media like CoinDesk and The Block
2. Technical traders
Advantages: has clear buy and sell signals, suitable for disciplined individuals
Disadvantages: requires a learning curve, easy to get caught in conflicting indicators
Typical operation: chase long positions after breaking $105,000, stop loss if it falls below $101,000
3. Following traders
Advantages: saves time and effort, follow the moves of big players
Risk: the probability of encountering pump-and-dump scammers exceeds 70%; a certain KOL's signal last month led to collective liquidation of followers
Pitfall guide: check real trading records, look at historical win rates, start with small amounts
Advice for beginners: use $500 to test these three factions, choose the one that feels right. Remember not to put all your eggs in one basket, and even if following signals, do not exceed 20% of total funds.
Four, those who have stepped into these pitfalls are all crying
Here are a few painful lessons to help everyone save some tuition:
Leverage trap: a college student used 20x leverage to buy Ethereum, and a 5% price fluctuation led to complete loss
Fake platform scam: a counterfeit exchange disguised as Binance, users deposit 100,000 USDT and cannot withdraw
Contract spike: a certain exchange suddenly dropped 20% at midnight, triggering long positions, then recovered to the original price in 5 minutes
Dogecoin pyramid scheme: MEME coin surged 100 times in three days, and the founder absconded with funds, causing the coin price to drop to zero
Three principles for survival:
Assets exceeding 10,000 RMB must use cold wallets
Leverage should not exceed 1/10 of the principal
Only trade mainstream coins in the top 50 by market cap
Five, personal opinion: short-term wealth is not as good as steady income
Having been in the crypto space for 8 years, I've seen too many stories of overnight wealth followed by zero. Here are three heartfelt pieces of advice for beginners:
Prioritize spot trading: contracts are for advanced players; 9 out of 10 lose money
Learn to wait for opportunities: capturing 3-5 certain market trends throughout the year is enough; don’t trade every day
Set hard stop losses: cut losses immediately if exceeding 10%, being alive gives you a chance to recover
Recently noticed an interesting phenomenon: 80% of retail investors making profits in 2025 had less than 5 trades a month. In contrast, those who watch the market daily have a loss probability of over 90%. So don’t let K-lines dazzle you; remember that slow is fast, and less is more.
Finally, here’s an exclusive statistic: the current Bitcoin exchange inventory is only 1.97 million coins, a five-year low. What does this mean? Whales are hoarding coins while retail investors are in chaos. If you can’t take this advice, I suggest you check the Weibo of those who liquidated in 2018; their heartbreaking stories are much more shocking than this article.
If you find this content beneficial, don’t close the page just yet—because in the next issue, I will reveal a hidden trick that makes 90% of readers exclaim ‘so that’s how it is’
