Everyone, today’s market for Bitcoin and Ethereum is indeed thrilling. Bitcoin dropped sharply from a high of 121143 to 117691 within five minutes, and the current price is fluctuating around 118900. Many friends are likely caught in this sudden drop. Don’t panic, Yunlu is here to share some break-free strategies, hoping to help everyone smoothly navigate this turbulent market.
1. Judging the Trend is Key
First, we need to stay calm and assess the overall trend of Bitcoin. Although there has been a significant decline in the short term, from a longer-term perspective, if Bitcoin is still in an upward trend, then this drop is likely just a pullback on the way up. For instance, since the beginning of this year, Bitcoin has generally shown a fluctuating upward trend, and there have been similar rapid declines, but they were followed by even stronger increases. Therefore, if the major trend remains unchanged, for those who are lightly positioned and facing losses, it may be wise to patiently hold on and wait for the price to recover.
2. Flexibly Respond According to Position Size
1. Lightly Positioned and Facing Losses: If you have a relatively light position and are facing losses during this drop, you still have considerable room for maneuvering. You can take advantage of price rebounds, for instance, when Bitcoin rebounds to a certain height, close to the short-term resistance level on the hourly chart, consider reducing your position to lock in some losses. When the price drops again, you can then repurchase the reduced position, continuously lowering your holding cost through this high-selling, low-buying strategy, thus achieving break-free.
2. Heavily Positioned and Facing Losses: If you are heavily positioned and facing losses, the situation is a bit trickier. If your account funds are still relatively sufficient, you might consider adding to your position when the price drops to key support levels to lower your average cost. However, be cautious not to invest too much at once to avoid further expanding risk if the price continues to drop. For example, Bitcoin has strong support near 115000; if the price drops to around this level, you could use part of your funds to add to your position. If your account funds are nearly depleted and close to liquidation, you may need to painfully cut a portion of your position to ensure you can survive in the market, then wait for clearer market signals to re-establish your positions.
3. Skillfully Use Technical Indicators for Assistance
We can also use some technical indicators to help determine the timing for breaking free from losses. For example, looking at the MACD indicator, if the MACD histogram starts to shorten and the DIF line has a tendency to cross above the DEA line, this could be a signal for a short-term rebound, and it may be worth considering reducing or adding to positions at this time. Similarly, with the KDJ indicator, when a golden cross occurs in the oversold area, it also suggests that the price may rebound, which serves as a reference for our break-free operations.
4. Pay Attention to Market News
The cryptocurrency market is greatly influenced by news. Recently, it is crucial to closely monitor the policy dynamics regarding cryptocurrencies from various countries, as well as changes in Bitcoin holdings by major institutions. For instance, if a major financial institution announces an increase in Bitcoin holdings, it could positively impact the market, pushing the Bitcoin price up, which would be very beneficial for us to break free from losses. Conversely, if negative news emerges, more cautious actions may be necessary.
In summary, when facing losses with Bitcoin, everyone must remain calm and not act blindly. Based on your actual situation, combine these break-free strategies to formulate a strategy that suits you. I hope everyone can break free from losses soon and reap rewards in the cryptocurrency market!
