'Being trapped is not scary, but chaotic operations can be fatal!' Trapped with a 4600 short position? Three tricks to teach you how to turn the tables!

'The biggest fear in trading cryptocurrencies is not being trapped, but panicking after being trapped, leading to reckless operations that result in losing your principal!' Last night Powell's remark sent ETH directly to 4888 USD, setting a new all-time high; those who shorted at 4600 hoping for a pullback are probably feeling weak — don't panic! I have experienced the Bitcoin crash in 2017 at 20,000 USD and the 312 crash in 2020, witnessing many people trapped and making reckless moves, and I have also helped many turn losses into profits. Today I will teach you how to break free from being trapped with three practical strategies + key level analysis, guiding you step by step!

What happened last night? Why were the shorts 'annihilated'?

On August 22, Powell at the Jackson Hole annual meeting turned dovish: 'The balance of economic risks has changed, and policies may be approaching a turning point.' This statement ignited the market directly — traders bet on a 90% chance of rate cuts in September! Cryptocurrency exploded instantly, with ETH soaring from 4230 USD to 4888 USD, and 694 million USD liquidated across the network in 24 hours, with 470 million in short positions liquidated (accounting for 65%).

Why are the shorts suffering so badly?

  1. Macroeconomic policy shift: Expectations of Federal Reserve rate cuts are rising, with funds flooding into risk assets, and cryptocurrencies have become the 'new favorite for inflation hedging';

  2. Ethereum's fundamentals are too strong: The daily net inflow of spot ETFs is 287.6 million USD, corporate holdings have skyrocketed to 31 billion USD, and the exchange balance is only 14.9 million coins (the lowest since 2016), with supply and demand imbalance directly pushing up prices;

  3. Technical breakthrough: ETH has broken through the previous high of 4878 USD before 2021 in one go, bullish sentiment has completely exploded, and short stop-loss orders have been triggered, forming a 'stampede-style rise'.

Trapped with a 4600 short position? Three strategies to break free from being trapped

Strategy 1: Reduce positions to relieve pressure, wait with light positions (suitable for heavy positions)

Applicable scenarios: Account floating loss exceeds 20%, principal is over 50% trapped.
Operation method: Cut 10% of the position for every 50 points rebound, first reduce the total position below 30%.

Key point: Don't be reluctant to cut losses! As long as the green mountains remain, you can wait for a pullback.

Strategy 2: Average down in batches, flatten the average price (suitable for light positions)

Applicable scenarios: Account floating loss is less than 10%, principal is trapped within 20%.
Operation method:

  • Step 1: Add 1/3 to the short position at 4690 (for example, if the original position is 30,000 U, add 10,000 U);

  • Step 2: Add another 1/3 when it rebounds to 4750-4780 (add another 10,000 U);

  • Step 3: Bring the average price down to around 4650, and wait for it to drop to 4550 (the 60-day moving average on the 4-hour line) to take all profits.

Strategy 3: Stubborn holding strategy, strict stop-loss (suitable for betting on market trends)

Applicable scenarios: Believe that ETH will pull back and can accept short-term floating losses.
Operation method: Pull the stop loss to 4850 (50 points above the previous high), betting that the market will re-test the bottom at 4500-4550 (the starting point from last year's Double Eleven, institutional cost zone) and then close the position.

Key levels and risk control (don't let breaking free from being trapped turn into liquidation)

  • Resistance levels: 4750 (intra-day neckline, breaking it may push to 4850), 4850 (previous high, the last line of defense for bulls);

  • Support levels: 4550 (institutional cost zone, breaking it may drop to 4450), 4450 (previous low, breaking it may drop to 4300).

Ironclad rules of risk control:

  1. Don't let single losses exceed 20% of the principal (for example, if the account is 100,000 U, the maximum loss is 20,000 U);

  2. Don't add positions during wild fluctuations (extreme market sentiment, adding positions is like throwing money away);

  3. Leverage should not exceed 3 times (the higher the leverage, the faster the liquidation).

My view: ETH may pull back to 4550-4600 in the short term, but I see it reaching 6100 USD in the medium term (Fibonacci extension level). However, don't chase the highs! 4750-4850 is a high-risk area; wait for a pullback to 4200-4350 (healthy turnover area) before considering adding positions.

Want to break free from being trapped? First answer these three questions!

  1. Is your position heavy or light?

  2. Which strategy do you prefer?

  3. Have you set a stop loss?

Finally, I'll leave you with a saying: 'In the crypto world, those who survive the longest are not the ones who earn the most, but those who lose the least.' I am Shence, follow me, and next time I'll teach you 'how to make 100,000 U with 1,000 U in a bull market'! #ETH创历史新高