The crypto market is experiencing a major drop! BTC and ETH have lost all key levels, what should we do now?
Folks! I just saw the news and was stunned—BTC has dropped below 120500 USD, and ETH couldn't hold on either, losing the 4200 USD level! In just 5 minutes, BTC fell by 0.15%, and ETH by 0.22%; this drop is too fierce, we need to quickly analyze the market and teach everyone how to respond!
One, first look at the significance of the 'key level breakdown' signal
No matter how long you’ve been in crypto, you must remember: round numbers are the core of the bull-bear psychological game!
- BTC at 120500 USD and ETH at 4200 USD are both 'psychological support levels' that have been contested repeatedly recently. Once broken, it indicates that short-term bearish forces are dominant, and market sentiment will be weaker.
- From a technical perspective, after breaking these two levels, the support below must look at the previous range: BTC should pay attention to 118000 - 120000 USD, and ETH should look at 4100 - 4150 USD. If these supports also fail to hold, the downtrend may continue!
Two, why did the drop happen? 3 key reasons
1. Macroeconomic sentiment transmission: Recently, the stock and forex markets have been highly volatile, with rising risk aversion sentiment, making the crypto market prone to collapse (after all, the connection between the crypto world and traditional finance is deepening).
2. Chain reaction of leverage liquidations: Many people added leverage to bet on price movements at key levels, and once broken, liquidation orders get triggered, causing prices to collapse due to 'longs killing longs and shorts killing shorts'.
3. Institutional Fund Trends: Large institutions may 'hammer down' at key positions to shake retail investors out, then buy back at a lower price (don't doubt it, this is an old trick).
Three, how should we operate now? Let's discuss in 3 scenarios!
1. Friends holding a full position
Don't panic! First check if the coins in your position are mainstream quality coins (like BTC, ETH, BNB). If they are mainstream coins, don't panic sell during a short-term drop, after all, the long-term logic is still there (institutional holdings and ecological development are still intact). But set a 'stop-loss bottom line': for example, if BTC drops below 115000 or ETH drops below 4000, then recognize the loss and exit, don't hold on until it goes to zero.
2. Friends with a light position or no position
Congratulations! This drop is actually a 'buying opportunity'! But don't rush to bottom-fish; wait for the panic to subside (for instance, check if the trading volume decreases, or if the price stabilizes).
- If you're conservative: wait for BTC to return to 118000 - 120000, and ETH to return to 4100 - 4150, then gradually build your position (for example, buy in 3 batches, adding a little more as it drops).
- If you're aggressive: if you see large capital inflows and increased trading volume, it indicates that institutions are bottom-fishing; you can also try small positions.
3. Friends trading contracts with leverage
Quickly self-check! If you've opened high leverage, now either stop-loss and exit (don't let a liquidation lead to greater losses), or reduce your position and lower your leverage (to reduce liquidation risk). Contracts can be a 'meat grinder' once the market crashes, don’t gamble on luck; preserving your capital is the most important!
Four, looking at the long term, is this drop a 'crisis' or an 'opportunity'?
To be honest— for quality coins, a drop is actually an opportunity to enter*!
- For mainstream coins like BTC and ETH, in the long run, it’s about 'institutional allocation + ecological support'; as long as the crypto market is not dead, the value remains. This time breaking key levels has created 'cost-effectiveness', suitable for gradual accumulation.
- But for small altcoins or 'air coins', a drop might be a 'prelude to going to zero', don't think about bottom-fishing for a comeback; it's highly likely you'll just keep losing.
Lastly, I remind everyone: the crypto market is highly volatile, don’t let short-term fluctuations affect your mindset! Whether you're holding a position or not, control your position well and set proper stop-losses to play for the long term~
If you want to know how to operate specific coins, or want to discuss market movements in real-time, leave a message in the comments or private message me, let’s endure this drop together!
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