Today, a friend in the crypto community shared a method for spot compound interest. For example, buying during a significant drop, realizing a profit of 30%, and then waiting for the next low point. At this time, the principal becomes 1 + (1 × 1.3), and it continues to roll over... This is the ideal scenario for a rolling compound interest model. The prerequisite for achieving this kind of compound interest is to consistently buy at the low points and sell at the high points, and there can be no greed. Moreover, prices won't just keep rising after purchases; aside from Bitcoin, any altcoin undergoes periodic adjustments. Therefore, based on human weaknesses, it is difficult to achieve continuous compounding in this ideal state. At the same time, the risks are also rising in sync. Although theoretically, in spot trading, as long as you don't sell, you don't incur losses, the time cost of being stuck after continuous rolling is actually magnified. It's best to have a fixed principal; without liquid funds to make up for losses, it won’t work.

For example, if BTC drops to 74600 again, would you buy? Definitely, but I would only buy 0.5 of my position. If it falls through 73800 and goes down to 64000, would you buy? I would also buy a little because this is a 50% retracement level. If it falls through 64000, it's heading to 52000; would you buy again? I must buy a little more because this is a retracement to the golden ratio. If it falls through 52000, we are in a deep bear market, and it’s down to 36000-24000. This is the ultimate bottom of the big bear market, and I would go all in with whatever funds I have.