Preface: A fan friend fed my articles written over the past three years to AI, analyzing and organizing my overall trading style. Thanks to this friend. I know many friends silently support me, and honestly, I’m quite touched. I write articles without much technique or intention to generate traffic, more to output while organizing my trading thoughts; it’s a form of self-growth. If it can help everyone, that’s the best. Now I share the AI analysis results.

Coin Grandpa's Cryptocurrency Trading Thinking Method:

Based on 'Coin Grandpa's' daily records from November 2022 to August 2025, his trading thinking reflects deep experience with bull and bear cycles, emphasizing counter-intuitive operations, position management, and long-term value orientation. He views the crypto market as a high-volatility opportunity space but remains alert to human weaknesses and risks, pursuing stable returns that transcend cycles. The following organizes his detailed thinking method according to a logical framework, including market cognition, emotional management, strategy execution, asset selection, risk control, and long-term vision.

1. Market Cycle Awareness: Bull Short Bear Long, cycles drive everything

Bear Markets Dominate, Opportunities in Low Points: He believes that 90% of time in the crypto market is in Bear or oscillation ('garbage time'), Bear Markets often last 1-2 years (e.g., 2022-2023), characterized by liquidity exhaustion, shrinking trading volume (e.g., daily exchange trading volumes drop to historical lows), price declines or crashes (e.g., FTX incident leading to market collapse). Bear Market bottom signals: no one cares, extremely pessimistic sentiment (e.g., collectively bearish on BTC to 10,000), low volatility, main players accumulating (e.g., repeatedly testing support levels without breaking). He emphasizes that Bear Markets are the golden period for building positions, repeatedly calling for layouts at lows (e.g., BTC 16,000, ETH 1,000), viewing it as a 'seeding period', waiting for the Bull Market to 'bloom'.

Bull Market Brief Frenzy, Easy to Make Mistakes: Bull Markets last only 3-6 months (last round about a year), huge gains but prone to bubbles (e.g., crash after the 2021 peak). Bull Market Issues: Difficult to take profit (high emotions chasing highs or not selling), significant differentiation (BTC rising alone, altcoins rotating). He judges Bull Market initiation signals: capital inflow (e.g., ETF approval, institutional buying), hot narratives (e.g., DeFi Summer, inscription craze), broad increases (e.g., mainstream/altcoins following). This Bull Market (2024-2025) drivers: halving cycle, ETF funds, policy friendly (e.g., Trump support), expecting BTC targets of 100,000-150,000, ETH 10,000, but distinguishing between 'small bull' (upward consolidation in the first half) and 'big bull' (full explosion next year).

Cycle Linked External Factors: The market is influenced by macro factors (e.g., Federal Reserve interest rate cycle leading to liquidity crises, interest rate cuts boosting risk assets). Crypto amplifiers: external positive factors (e.g., U.S. stocks rising) drive rebounds, but independence is strong (e.g., black swan events like FTX leading to mispricing). Historical cycles: BTC cycles every 4 years (fall 1, rise 3), speculative small markets before halving, effects show 1 year after halving. He sees BTC as a 'gold substitute', ETH as the 'king of applications', focusing on the balance of 'value + speculation' during cycles.

Technical Indicators Assistance: Focus on support/resistance levels (e.g., BTC 60,000 support, 110,000 resistance), trend lines (if daily upward trend holds, then rebounds), volatility (low volatility breeds big markets). In poor liquidity, volatility amplifies, easily leading to spikes (e.g., weekends/holidays).

2. Emotion and Human Nature Management: Counter-intuitive thinking, faith recharge is core

Emotion as a Contrarian Indicator: Buy during panic ('maximum panic at the bottom'), sell during frenzy ('maximum greed at the top'). He repeatedly 'recharges faith' in Bear Markets (e.g., calling for layouts at BTC 16,000, ETH 1,000), 'pours cold water' on profits in Bull Markets (reducing positions at highs). Bear Market traps: fear to buy (waiting for lower prices), easy to sell (panic stop loss, e.g., '480,000 brother' rebounds and sells); Bull Market traps: chasing highs, not taking profits (getting stuck at high positions). He emphasizes overcoming 'cognitive inertia' (less watching and acting in Bear Markets, high throw-low buy in Bull Markets).

Psychological Resilience: The agony of the Bear Market lies in unrealized losses + time ('dull knife cuts meat'), solutions: view the Bear Market as a 'seeding period', staggered entry to lower costs, forced locking (e.g., small circle staking BNB/ETH). In Bull Markets, be wary of 'path dependency' (tasting sweetness in swings, selling off low-priced chips). He creates small circles to warm each other, emphasizing that 'optimists succeed, pessimists are correct', with faith stemming from BTC's anti-inflation and ETH's ecological prosperity.

Addressing Human Weaknesses: Operate against human nature (buy when the market is bearish), position psychological anchoring (low-cost chips are easy to hold). He sees institutions as 'enemies', with institutions washing positions in Bear Markets (long-term oscillation + negative news), selling out in Bull Markets (inducing buying). Recommendations: anchor value rather than price in psychology, hold long-term 'ignore fluctuations'.

3. Strategy Execution: Staggered entry on the left, position control, swing assists long-term

Position Building Principles: Staggered entry on the left, betting on rebounds while also long-term: Do not predict bottoms in Bear Markets (e.g., BTC may drop below 10,000 but low probability), buy in batches based on USDT (e.g., buy 10,000 USDT at BTC 16,000, then buy again at 12,000, lowering cost). Left-side trading (entering during lows) is better than right-side (waiting for reversals), position stratification: 30-50% base position (long-term), 10-20% active (swing), total position 50-80% to avoid full positions. Regular investment in Bear Markets (fixed daily amount in BTC, cycle 1-2 years).

Take Profit and Reduce Positions: Flexible, staggered selling at highs: Reduce active positions at rebound pressure points (e.g., BTC 18,000, ETH 4,100), hold long-term until Bull Market peaks (double out principal, keep profit coins). In Bull Markets, take profit in batches (reduce 10% for every 1,000 increase), trading principles: sell at pressure points, buy at support points, capture 10-20% spreads. In the latter half of Bull Markets, 'multiple crashes', buy the dip, take profit on spikes.

Operational Rhythm: Small markets, small positions, learn more with less action: Be cautious in Bear Markets (contracts are risky, easy to blow up), high throw-low buy in Bull Markets. Swing tools: options (selling calls for rent, dual currency wins), arbitrage (funding rates, flexible borrowing). Frequent short-term sideways/oscillation (the 'garbage time'), need patience ('endure loneliness'). Strategies change with cycles: build positions on the left side in Bear Markets, follow up on the right side in Bull Markets.

Cash Flow Planning: Increase sources and cut costs, external funds are key: In Bear Markets, increase sources (arbitrage, new projects, airdrop harvesting), cut costs (less leverage, diversify assets). In Bull Markets, realize part of the profits, external income supplements capital ('idle money investment').

4. Asset Selection: Value-Oriented, Diversified Allocation

Core Assets: BTC/ETH as the main: highest safety, long-term value growth (e.g., BTC's anti-inflation, network effect; ETH's ecological prosperity, 'supercomputer'). He sees BTC as a 'gold substitute', ETH as the 'king of applications', heavy position in Bear Markets (high allocation in ETH), holding in Bull Markets (betting ETH outperforms BTC). The target for this round of Bull Market: BTC 100,000-150,000, ETH 10,000.

Mainstream and Altcoins: Balance risk and reward: Mainstream (e.g., BNB, SOL, LTC, XRP, DeFi blue chips like AAVE, COMP, UNI): strong fundamentals, won't die (DeFi exchange trends, LSDfi potential), staggered spot buying in Bear Markets, rotating allocation in Bull Markets. Altcoins (10-20% position): bet on high multiples (tens to hundreds), screening: listed on big exchanges (BN/OK), institutional investment (Binance Labs/A16z), pulled up during Bear Markets (manipulated by big players), low market cap (avoid high unlocks like OP). Avoid imitation coins/obsolete projects (e.g., DeFi imitations).

Sector Allocation: Trends + Hotspots: Prioritize DeFi (the 'cornerstone'), Web3 (infrastructure), GameFi (application landing), AI Agent (emerging narratives) in Bull Markets. Focus on value in Bear Markets (e.g., DeFi blue chips, L2 ecosystems like ARB/OP), chase hot spots in Bull Markets (e.g., inscriptions/MEME, but small positions). L1/L2: ETH as the main chain, SOL/Aptos for high-frequency applications.

Value Judgment: Intrinsic Growth Rather Than Price: Focus on Business Models, Cash Flow, Teams (e.g., DeFi Cash Flow, Ecological TVL), Narrative Potential (e.g., RWA, Restaking). Prioritize Mispricing Opportunities (e.g., BIT mispricing caused by the FTX incident). New narratives for Bull Markets (e.g., AI Agents), select Blue Chips for Bear Markets (DeFi/LSDfi).

5. Risk Control: Preventing Black Swans, Safety First

Black Swan Awareness: Bear Markets are prone to explosions (e.g., FTX misappropriating funds, Luna crash, 500,000 ETH stolen from bybit). Solutions: withdraw assets to wallets (preferably cold wallets, stored separately), avoid small exchanges/small projects, choose top protocols in DeFi. Opportunities after black swans (e.g., mispricing recovery).

Liquidity/Volatility Risk: Lack of liquidity in Bear Markets, prone to crashes/spikes (e.g., weekends/holidays). Avoid contracts ('easy to blow up'), focus on spot. Strong manipulation by institutions (most dog coins lose bets).

External/Internal Risks: Macroeconomic (e.g., interest rate liquidity crises, tariff wars), policy (e.g., SEC lawsuits, tax reforms), project failures (e.g., unlocking pressure). Diversify: core + mainstream + altcoins (mainstream occupies 60-70%). Asset safety: avoid leverage, backup private keys, minimize transfers.

Sentiment/Human Nature Risks: Panic Selling (cutting losses at low points), FOMO chasing highs. Control: Position not exceeding 80%, double out principal, keep cash flow. Cycle Risks: Bear Market 'washing faith', Bull Market 'inducing selling out'.

6. Long-Term Vision: Value Growth, Faith Driven

Industry Potential: Low Cryptocurrency Market Value (BTC occupies half), unlimited space compared to gold/U.S. stocks. BTC is anti-inflation/network effect, ETH ecological innovation (DeFi/Restaking/L2). He sees the crypto space as a 'land of heroic dreams', optimistic in the long term ('big bull market 100,000 BTC, 10,000 ETH').

Investment Philosophy: Time for Space (Bear Market Beta, Bull Market Alpha). Faith stems from technological revolution (blockchain/smart contracts), capital inflow (ETF/institutional). Bull Market 'value + narrative' (DeFi/inscription/AI Agent).

Life Insights: Investing is like life, stick to doing the right things ('endure the loneliness'). Transcend cycles ('bull short bear long'), warm each other in small circles. Success comes from effort + faith ('optimists succeed').

Overall, the thinking of 'Coin Grandpa' is pragmatic and counter-intuitive: recharge faith in Bear Markets, pour cold water on profits in Bull Markets. He views the market as a game between 'institutions vs. retail', emphasizing execution (staggered/swing), learning (new narratives/arbitrage), ultimately achieving excess returns through cycles.