How to grasp the buying and selling opportunities in the cryptocurrency market?
1. Look at the technical aspects:
Moving Averages (MA)
Buying Point: Short-term moving average (5-day line) crosses above long-term moving average (20-day line), for example, when BTC breaks above the 20-day line.
Selling Point: Short-term moving average crosses below long-term moving average, for example, when ETH breaks below the 5-day line.
Support and Resistance Levels
Buying Point: Price drops to historical support level (e.g., BTC repeatedly halting at $25,000).
Selling Point: Price rises to historical resistance level (e.g., ETH encountering resistance multiple times at $2,000).
MACD Golden Cross / Death Cross
Buy when there is a Golden Cross (white line crossing above yellow line), sell when there is a Death Cross (yellow line crossing below white line).
2. Look at market sentiment:
Fear and Greed Index
Sell when greed value > 70 (for example, when BTC rises to $60,000 in 2024, index reaches 85).
Buy when fear value < 30 (for example, during the 2022 bear market, the index dropped below 20 multiple times).
Volume Spike
If a coin's trading volume doubles suddenly in one day, it may signal a major player entering, which can be followed up.
Sell during continuous shrinking volume rises (without funding to support, it is likely to drop).
3. Look at the fundamentals:
Major Positive / Negative News
Buy before good news: for example, the price often rises in advance one month before the ETH upgrade.
Sell when good news is fully realized: for instance, after a coin goes on a major exchange, it often experiences 'sell the news'.
Halving Cycle
BTC halves every 4 years, typically rises 6 months before halving (e.g., before the April 2024 halving, BTC rose from $16,000 to $40,000).
4. Iron Rules:
Do not chase rises or panic sell.
Do not buy after rising for 3 consecutive days, and do not sell after falling for 5 consecutive days (to avoid being washed out by short-term fluctuations).
Buy and sell in batches.
Buy in 3 batches: buy 1/3 when it drops 10%, buy another 1/3 when it drops 20%, buy the last 1/3 when it breaks through the support level.
Sell in 2 batches: sell half when it rises 50%, sell all when it breaks the previous high.
Set stop-loss and take-profit.
Stop-loss: sell decisively when it drops 15% below the purchase price.
Take-profit: for a profit of 30%-50%, take profit in batches (in a bull market, it can be relaxed to 100%).
Ultimate mantra:
Buy big on big dips, buy small on small dips; sell when good news is realized, buy when bad news is fully priced in; when others are greedy, I run; when others are panicking, I pick up money!
