In the trading world of cryptocurrencies, market fluctuations are like waves, sometimes surging upward and sometimes plummeting down. This week, Bitcoin and Ethereum have experienced significant volatility, leaving many traders trapped. Here, we at Yuntu share recovery strategies for friends who are deeply trapped, helping everyone find a breakthrough in turbulent market conditions.
1. Judging trends is key
First, we need to calm down and assess the overall trend of Bitcoin. Although there has been a significant drop in the short term, from a longer-term perspective, if Bitcoin is still in an upward trend, this downturn may just be a correction along the way. For example, since the beginning of this year, Bitcoin has generally shown a fluctuating upward trend, with similar rapid declines occurring but followed by even stronger increases. Therefore, if the big trend hasn’t changed, for those lightly trapped, it may be worth patiently holding and waiting for a price rebound.
2. Flexibly respond based on positions
1. If you are lightly invested and trapped: If your position is relatively light and you are trapped during this downturn, there is still quite a bit of operational space. You can take advantage of price rebounds, for instance, when Bitcoin rebounds to a certain height, close to a short-term resistance level on the hourly chart, you can reduce your holdings appropriately to lock in some losses. When the price drops again, you can buy back the reduced position, using this high sell and low buy strategy to continuously lower your holding cost and thus recover your position.
2. If you are heavily invested and trapped: If you are heavily invested and trapped, the situation is a bit tricky. If your account still has sufficient funds, you might consider adding to your position when the price drops to a key support level to lower your average cost. However, be careful not to invest too much at once to avoid further risks if the price continues to decline. For example, Bitcoin has strong support around 115,000; if the price drops near this level, you can use some funds to add to your position. If your account funds are nearly depleted and close to liquidation, you may need to reluctantly cut some positions to ensure you can survive in the market, and then re-establish your strategy once the situation clarifies.
3. Skillfully use technical indicators for assistance
We can also use some technical indicators to help determine the timing for recovery. For example, look at the MACD indicator; if the MACD histogram begins to shorten and the DIF line trends above the DEA line, this could be a signal for a short-term rebound, and you might consider reducing or adding to your position at this time. Similarly, for the KDJ indicator, when it forms a golden cross in the oversold region, it also indicates that the price may rebound, which serves as a reference for our recovery operations.
4. Pay attention to market news
The cryptocurrency market is heavily influenced by news. Recently, it's important to closely monitor the policy dynamics of various countries regarding cryptocurrencies, as well as news about the holdings of large institutions in Bitcoin. For example, if a major financial institution announces an increase in Bitcoin holdings, it could have a positive impact on the market, driving up Bitcoin prices, which would be very beneficial for us to recover our positions. Conversely, if negative news arises, we may need to operate more cautiously.
In summary, when Bitcoin is trapped, everyone must remain calm and not operate blindly. Based on your actual situation and in combination with the above recovery strategies, develop a recovery strategy that suits you. I hope everyone can recover their positions soon and reap rewards in the crypto space!
