1. 5 Core Laws: Understand the Trends, Avoid 80% of the Pitfalls
1. Fast Rise, Slow Fall — The Whales are Accumulating
When the price of the coin rapidly surges and does not experience a sharp drop but rather slowly retreats and oscillates, it does not mean the trend is over; it indicates that the whales are 'quietly stockpiling.' This trend suggests low selling pressure and stable buying, likely accumulating chips for the next round of increases, so don’t rush to sell.
2. Fast Fall, Slow Rise — The Whales are Distributing
If the price of the coin suddenly drops significantly and then only slowly rebounds, even the strength of the rebound weakens, it indicates that the whales are 'selling in batches.' It may seem like a rebound, but in reality, it aims to attract buyers, and it is likely to enter a continuous decline thereafter, so don’t easily attempt to catch the bottom.
3. Don't Sell at Volume Peaks, Run Away When There's No Volume at the Top
When the price of the coin rises to a high level, if the trading volume suddenly increases (doubling compared to the previous days), it indicates that more funds are entering the market, likely allowing for further increases, so don’t rush to take profits; but if the trading volume at the top shrinks (decreasing by more than half compared to previous days), it indicates that no one is willing to take over, and the upward momentum is exhausted, so quickly exit to avoid being trapped at the peak.
4. Don't Buy at Volume Bottoms, Enter When There's Continuous Volume Increase
When the price of the coin drops to a low level and suddenly sees a large decline, it is not necessarily a 'bottom signal'; it may indicate panic selling, and further drops may occur (which is a 'downward continuation'), so don’t rush to catch the bottom; only when the bottom has seen continuous volume for 3-5 days (with steadily increasing trading volume) should you consider buying, as the safety factor is higher at that time.
5. Trading Coins is Trading Emotions; Consensus Depends on Trading Volume
Whether the price of the coin rises or not is essentially determined by 'market sentiment' — if everyone is optimistic, they will chase the price up; if everyone is panicking, they will sell off. The 'barometer' of sentiment is trading volume: high trading volume indicates strong consensus (either unanimously bullish or unanimously bearish); low trading volume indicates that no one cares, and the market is likely to consolidate.