The bull market in the crypto world resembles a grand and crazy party, attracting countless people with dreams of wealth. In this fantastical market, the prices of mainstream cryptocurrencies like Bitcoin and Ethereum soar like rockets, with new wealth myths constantly being written, and the air seems to be filled with the scent of money.
But is a bull market really a land of gold where everyone can get rich? Let's analyze it in depth.
Historically, bull markets in the crypto world often have some notable characteristics. The price trends of mainstream coins serve as key indicators, with Bitcoin and Ethereum leading the charge, continuously reaching new highs and driving a host of smaller coins upward. Meanwhile, the trading market becomes exceptionally active, with buy and sell orders flooding the exchanges, trading volumes multiplying compared to usual, and even niche coins that usually go unnoticed frequently changing hands, indicating that a large amount of new capital is rushing into the market.
Furthermore, market sentiment is extremely enthusiastic, with FOMO (fear of missing out) at its peak, as 'crypto gurus' share their wealth experiences everywhere in social circles, even those new to cryptocurrency can't help but eagerly ask about the right time to enter the market.
In the current bull market, there are many strong driving factors behind it. For example, Bitcoin has broken through the $110,000 mark, supported by strong institutional buying and favorable regulatory news.
On one hand, companies like Strategy (formerly MicroStrategy) are continuously increasing their Bitcoin holdings, accumulating over $50 billion in value, while many investment institutions focused on cryptocurrencies are also collectively buying Bitcoin and related ETFs, injecting continuous capital into the market.
On the other hand, positive signals are coming from the regulatory side, as the U.S. Senate steadily advances the stablecoin bill. Under the openly supportive Trump administration for cryptocurrencies, digital asset companies are expected to welcome a clearer and more favorable regulatory framework, which undoubtedly reassures the market.
However, while a bull market is good, it hides undercurrents. First of all, there is always the risk of price volatility; even in a bull market, coin prices do not only rise without falling. During the 2021 bull market, for example, Bitcoin's price also saw significant corrections multiple times, leading to heavy losses for many who chased the highs.
Secondly, the market is mixed, filled with various altcoins and air coins that often attract investors with the guise of 'hundredfold coins' or 'thousandfold coins', which lack any real value support. Once the bubble bursts, investors may lose everything.
Moreover, regulatory policies still have considerable uncertainty, as various countries have different attitudes towards cryptocurrencies, and policies may change at any time, bringing significant shocks to the market.
For ordinary investors, maintaining rationality and formulating reasonable investment strategies during a bull market is crucial. In terms of asset allocation, it is recommended to adopt a 'pyramid' approach to building positions.
The foundation is built on mainstream coins like Bitcoin and Ethereum, which have large market caps and strong stability, resisting declines in bear markets and following trends in bull markets. They serve as the 'ballast' of the investment portfolio, accounting for 50%-70% of the total funds. When building positions, avoid putting all funds in at once; instead, consider dividing purchases. For instance, if planning to buy $100,000 worth of Bitcoin, you could split it into five purchases, buying $20,000 each time the price drops by 5%.
This dilutes costs. Middle-tier potential coins, such as Layer2 projects (Arbitrum, Optimism, etc.) aimed at solving Ethereum congestion, RWA projects (MakerDAO, Ondo Finance, etc.) that promote real asset tokenization, and decentralized infrastructure DePIN projects (Helium, Filecoin, etc.), have actual technical support and application prospects, which can account for 20%-30% of the funds.
But before investing, it is essential to thoroughly research the project's fundamentals, team strength, etc. At the top level, a small amount of funds (10%-20%) can be used to play with high-risk, high-reward coins like meme coins (Dogecoin, Pepe, etc.), but remember to only use 'idle money that you won't regret losing' to participate.
At the same time, strictly setting stop-loss and take-profit lines is key to controlling risk.
In terms of stop-loss, for example, if you buy a coin and its price drops by 20%, decisively sell and exit to avoid wishful thinking and prevent larger losses. For take-profit, when the coin price rises to the target price, first sell a portion to lock in profits; if the coin price doubles, you can sell half of the principal, and then watch the subsequent market trends. This way, even if the price falls back, you won't incur losses.
Additionally, leveraged trading carries enormous risks, and beginners should try to stay away from it. While 50x or 100x leverage may seem to instantly boost returns, even a slight adverse price movement could lead to liquidation, leaving investors in financial ruin.
The bull market in the crypto world is a battlefield of opportunities and risks; it can be a ladder to financial freedom or a bottomless pit that devours wealth. Investors must maintain a clear mind, deeply understand the market, formulate scientific and reasonable investment strategies, and strictly control risks to gain a share of this bull market feast, rather than becoming the 'chives' that are harvested.
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