After three years of trading cryptocurrencies, turning 10,000 U into 670,000 U, without insider information or betting on market trends, I simply honed a set of "volume-price observation methods". In 1,095 days of trading, I discovered that the pitfalls retail investors easily fall into are often hidden in the "fluctuations of rising and falling prices" — while the real opportunities have already been quietly signaled by trading volume.
Today, I’ll break down the insights gained from investing real money: understanding one rule can save you tens of thousands, and mastering three rules can save you three years of frustration compared to most retail investors.
One, "rapid rise followed by slow decline": don’t be scared off by a washout signal.
I’ve seen too many people mistake "rapid rises followed by slow declines" for a peak, only to panic and sell at a loss, realizing they missed out — this is actually a typical sign of a major player accumulating. A sudden surge of 5%-10%, followed by a slow decline over 3-5 days (with a drop of no more than 30%) is essentially "luring retail investors to chase during the spike, then using the slow decline to force them to sell", with the goal of quietly accumulating stock.
A true peak is never like this: it should be a sudden increase in volume hitting new highs (with volume doubling compared to the previous three days), followed by a "waterfall decline" (dropping more than 20% over 1-2 days), which indicates the major player is trying to lure people into buying. The former is about "testing patience", while the latter is about "rushing to escape", the difference lies in the "rhythm of volume".
Two, "rapid decline followed by slow rise": beware of the signs of a selling trap in the rebound.
Markets that slowly rebound after a flash crash can easily make people feel like it has "bottomed out" — but most of the time, this indicates the major player is "selling in batches". For instance, if a coin drops 15% in one day and then rebounds 7% over a week, it may seem to be "stabilizing", but in reality, the major player is gradually offloading their shares to retail investors.
Don’t hold onto the idea of "it has dropped so much, how much lower can it go" when trying to catch the bottom: a rapid drop creates "panic selling", while a slow rise gives "retail investors hope". When retail investors have nearly absorbed enough, there’s often a deeper drop waiting. At such times, "not catching the bottom" is more important than "catching the right bottom".
Three, look for "decreased volume" at the top: a new high without volume is truly dangerous.
Many people think "only when there is increased volume at the top should they sell", but that’s not the case. As long as there is volume at a high, it indicates that there is still money in play; it may even surge again; but if during a new high, the "volume suddenly decreases" — for example, if the price increases by 5% while volume decreases by 30%, that’s the precursor to a crash.
Volume is the "vote of capital": a new high without volume indicates that no one is willing to chase the price, and no matter how high the major player pushes it, it’s useless; they can only sell off their shares. Many coins peaked and fell like this in 2021.
Four, wait for "continued volume" at the bottom: a single volume spike is often a trap.
When there’s a sudden spike in volume at the bottom, don’t rush in — a single large bullish candle may be a trap set by the major player. The real bottom should be after a "period of reduced volume and oscillation", followed by a continuous increase in volume for 3-5 days (daily trading volume exceeding 50% more than during the oscillation period), indicating that real money is accumulating.
Decreased volume oscillation indicates "there's no market interest", while sustained increased volume means "real money is entering the market": the former is "stagnant water", the latter is "flowing water". Waiting for "flowing water" to come before taking action is much more stable than trying to catch a bottom in "stagnant water".
Five, the core of volume and price: K-line is the result, volume reflects people's sentiment.
K-line charts represent "completed market movements", they can be misleading and create patterns; but trading volume is "the footprint of real money", it can’t lie. A sudden decrease in volume indicates retail investors are no longer interested, and the major players haven’t moved — avoid such markets, they usually stagnate; a sudden increase in volume (without any bad news) means real money is flowing in, even if the K-line looks chaotic, it’s worth paying extra attention to.
In the end, trading cryptocurrencies is about "trading people's hearts": volume is a thermometer for people's sentiment — an increase in volume means "emotions are heated", a decrease means "emotions are cold". Following the thermometer is more reliable than guessing K-line.
Six, the "nothing" state of trading: no obsession, no greed, no panic.
The last point, which is unrelated to technique but is the most critical: the ability to embrace "nothingness".
"No obsession": when there’s no market activity, being able to hold cash without feeling like "not trading means losing money".
"Don’t be greedy": when prices rise, don’t always think about "selling at the highest point"; leave when you’ve earned enough to meet your goals.
"Don’t panic": when prices drop, don’t blindly sell at a loss; when it’s truly time to catch the bottom, have the courage to act.
This is not about lying flat; it's about training your mindset to "not be led by the market". I’ve seen too many people who understand K-lines and indicators fail because they "couldn’t resist" — in the end, trading is not about technique, it’s about "being able to control oneself".
The crypto world never lacks opportunities; what’s missing are "people who can wait for opportunities". It’s not that you earn slowly, but rather that you are constantly "acting blindly when there are no signals".
Remember these six rules well, and next time you look at the market, focus more on volume and less on guessing K-lines. You will gradually realize that the market isn’t as complicated as it seems; you just haven’t found the right "angle to view it".
Blindly working alone will never bring opportunities. Follow me, I will guide you to explore tenfold potential coins! Top-tier resources!
