To trade in the crypto market during a decline due to political news and not miss a reversal, follow these tips:
1. Actions when news appears
• Prepare in advance: Follow the economic calendar (FOMC meetings, regulatory discussions, elections). Before the announcement of important news, avoid over-leveraging and always set stop-losses.
• Trade by the principle of 'buy on rumors, sell on facts'. Often news expectations are already priced in, and after the news is published, there is a sharp price movement in the opposite direction.
2. How to understand when the bottom is?
• Extreme fear and capitulation: If the fear and greed index falls to lows, and there is total negativity and FUD on social media — this is often a good signal that the bottom is near. Mass capitulation and panic selling usually precede a reversal.
• Technical Oversold: Indicators like RSI (<30) or stochastic signal that the market is too oversold. Confirm this with other tools.
• Divergences: If the price updates its lows while RSI or MACD show higher lows — selling pressure is weakening, this is an early signal of a bottom.
• Volumes: At the bottom, there is often an abnormally high trading volume: weak hands exit, large players accumulate positions.
• Reversal patterns: 'Double bottom', 'head and shoulders' (at inflection), 'bullish hammer' on candlestick charts — classic signals of bottom formation.
3. How not to miss a reversal?
• Wait for confirmations: Prices have stopped updating lows, rising lows appear — this is a structural signal of a reversal.
• Breakthrough of the resistance level and subsequent retest: After a rise, the price returns to test the broken level, holding above — entering after such confirmation is safer.
• Multiple signals together: It is more reliable when signs coincide: divergence, pattern, and volume spike.
• Watch the macro and news background: Reversals often coincide with the easing of geopolitical tensions, lowering interest rates, or a softening of government rhetoric.
• Use analysis of multiple timeframes: True reversals are better visible on daily or weekly charts, rather than intraday.
4. Risk management
• Do not enter with the entire amount — practice DCA (dollar-cost averaging): Buy in parts during dips, do not try to catch the absolute bottom.
• Keep part of your portfolio in stablecoins or cash to be able to buy more or quickly exit in case of a mistake.
• Set clear stop-losses: This is especially important during aggressive news and high volatility.
5. Useful habits
• Watch social media and sentiment analysis services — the peak of negative comments often coincides with the market bottom.
• Do not trade solely on emotions. Always follow a specific system and capital management.
In short: the bottom is usually accompanied by panic, a spike in volume, divergences on indicators, and confirmed by rising lows. Once you receive confirmation on higher timeframes and signals from technical and news analysis, enter gradually, using stop-losses and risk control.
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