The term 'bottom fishing' sounds like a code for picking up money, but it has become the trigger for countless traders' accounts to reach zero. Watching the price drop, do you always feel that 'it's already low enough'? Don't rush to place an order; first clarify: is the current decline a disguise for opportunity, or the beginning of disaster?
One, a healthy decline: an opportunity in wolf's clothing.
A healthy decline is essentially a 'breather' on the way up for the market, like a brief adjustment during a long run, after which it can continue to sprint. Identify its four signals:
1. The overall trend hasn't worsened.
The overall trend remains bullish — for example, the highs and lows of the 4-hour candlestick are still synchronously rising, just a short-term correction. The drop at this time is more like 'backing up to pick someone up.'
2. Declining at the support level.
The price just happens to fall on key support levels (like previous lows, moving averages, or the 61.8% Fibonacci retracement level), like a ball hitting the ground, has natural rebound momentum.
3. Volume has not increased.
During a decline, if the volume is low, it indicates there is no panic selling; it's mostly retail investors locking in small profits while the main funds are still in.
4. Signs of bullish momentum appear.
The candlestick shows reversal signals: such as a hammer (the lower shadow is more than twice the body), engulfing pattern (the bullish candle engulfs the previous bearish candle), or a slight rebound after a drop.
A smart approach: wait for three confirmation signals before taking action.
Support levels really hold (the price no longer hits new lows).
Volume starts to increase (signs of capital entering).
An obvious bullish pattern appears (such as two consecutive bullish candles).
Two, a real crash: a 'flying knife' that can cut losses.
A crash looks like a decline, but in essence, it's a 'collapse of the building'; at this point, bottom fishing is like catching a falling knife with your hands, which will only leave you bloodied. Beware of these four danger signals:
1. Support levels shatter like glass.
Key support levels are easily broken, especially with significant volume — for example, important previous lows or platform levels; once breached, it can trigger a chain reaction.
2. Volume surges.
When the volume suddenly increases several times during a decline, it indicates that the main forces are fleeing wildly while retail investors are blindly taking over; at this point, the decline is just the beginning.
3. Big players are fleeing while novices are buying.
On-chain data shows: whale addresses are continuously selling, while new retail addresses are increasing — this is a typical 'taking over' signal.
4. It rises without looking back.
The price keeps hitting new lows without a decent rebound, like a free fall, with no bottom in sight.
Remember: the 'bottom fishing' at this time is not about picking up cheap, it's about giving money to the main forces. During the LUNA crash in 2022, how many people thought 'when it drops to $1, it’s the bottom', only to see it finally drop to $0.0001, with those who bottom-fished left with nothing.
Three, the golden rule of bottom fishing: don't be the first to eat crab.
1. Do not catch the bottom; wait for a rebound.
Real opportunities are proven by the market after it begins to recover. For example, when the price stops falling and starts to rise consecutively, entering at this point is ten times safer than guessing the bottom.
2. Clearly understand the pattern before taking action.
Only trade with clear reversal patterns — such as head and shoulders, double bottoms; these patterns have been validated by the market, resulting in a higher win rate.
3. Volume is the 'mirror of truth'.
During an uptrend, volume must increase, indicating real money entering, not just a false rise. A no-volume rebound is more like a 'flash in the pan'; don't believe it.
4. The most critical: control your position.
Even if it's confirmed as a healthy decline, don't exceed a 20% position on your first entry. Wait until the trend is completely clear, then gradually increase your position — remember, opportunities won't slip away just because you bought less, but being too heavily positioned may prevent you from holding on until the opportunity arises.
The last blunt truth.
The market never rewards 'quick hands'; it only rewards 'calm minds'. The temptation of bottom fishing is essentially driven by the psychology of wanting to pick up cheap. Rather than guessing where the bottom is, it is better to wait until the trend is clear before following — after all, in the crypto world, surviving is more important than making quick money.
If you really can't resist bottom fishing, first ask yourself: can I accept losing all this money? If you can accept it, then proceed; if not, just watch.
Blindly acting alone will never bring opportunities; follow Super Brother, and I will guide you to explore tenfold potential coins! Top-tier resources!
