Strategy for Trading During BTC Consolidation Phase
Rule No. 1:
Let the consolidation phase end gracefully—do not trade during this period.
During consolidation, the market aims to liquidate small investors, so it's better to stay on the sidelines.
Rule No. 2:
Track BTC's consolidation range. Identify the levels where rallies are occurring. Then, search for a coin that is performing in sync with BTC. For example, if BTC moves up, this coin should also move up, and if BTC moves down, it should follow the same trend.
Rule No. 3:
Stay away from market hype and irrational traders. They will constantly show and tell you about coins "pumping" and urge you to buy them immediately.
However, if you take a long entry based on their advice, two scenarios might occur:
Scenario 1: If you use 5x or 10x leverage, initially, the coin may pump for 2 minutes, giving you the impression that you timed your entry perfectly. Suddenly, a small dump will start, but you’ll recover within those 2 minutes, building your confidence. Eventually, a big dump will occur, and you’ll be trapped as you won’t get an opportunity to exit the trade. Most people end up closing their trades at a loss, fearing BTC’s larger dump potential.
Scenario 2: If you take heavy leverage, you’ll likely lose immediately because BTC dumps are severe. The market won’t give you a chance to recover, so avoid trading or long positions during consolidation.
Last Golden Rule:
Once you’ve identified BTC's consolidation range and selected a coin moving in sync with BTC:
When BTC reaches its upper peak, take a short entry.
Keep monitoring BTC's chart, and when BTC approaches its last support level in the consolidation range, exit your trade.
Avoid chasing heavy profits—focus on consistent, calculated gains.