The trend of BTC since it experienced the 312 incident in 2020 has revealed an interesting phenomenon: most declines are accompanied by significant amplification of trading volume, while rising volumes tend to be relatively small. What kind of market logic is hidden behind this?
First of all, we need to understand that market transactions are driven by both buyers and sellers. The increase in trading volume often means that the differences between buyers and sellers are intensifying. When BTC falls, the trading volume increases, indicating that as the price falls, there are a large number of buy orders at low levels. This may be because some investors believe that the price has reached a reasonable valuation range or see potential rebound opportunities. When the trading volume is small during an increase, it may indicate that holders are generally satisfied with the current price and are unwilling to sell easily, and the market shows a reluctance to sell.
This behavior of long-term holding and unwillingness to sell is often a typical tactic of institutional investors. As the number of chips circulating in the market gradually decreases, the market volatility will also decrease accordingly, gradually moving towards a more stable long-term bull trend. This is similar to some long-term rising stocks in the US stock market.
In contrast, markets dominated by retail investors who chase ups and downs, such as Tesla's stock, tend to have more drastic price fluctuations, with K-line trends opening and closing widely and full of uncertainty. But it is this huge volatility that provides investors with a fertile ground for making huge profits.
However, it should be pointed out that as the market matures and the proportion of institutional investors increases, the opportunities to quickly double wealth in a short period of time as in the past may become fewer and fewer. But at the same time, the market's certainty is also increasing, which is undoubtedly more attractive to large funds. Once these large funds enter the market, they may choose to hold for a long time, or even lock up their positions for several years or even decades.
As for where BTC will rise in the future, this is indeed a question that no one can accurately predict. But if you believe in the future and believe that this industry can bring you huge dividends, then this bull market that started in the fourth quarter of this year may be your last chance to seize the opportunity for short-term quick profits. If you miss this opportunity, you may have to wait for four years or even longer, and no one can guarantee whether the opportunity will come again.
Faced with such market opportunities, if you want to seize this round of bull market, it is obviously too late to learn and apply now. The best way is to find an experienced mentor to guide you to get started quickly and help you find your own foothold in this market full of opportunities and challenges.
