Since April, the crypto market has experienced a significant correction. Bitcoin has fallen below $75,000, while Ethereum has dropped to around $1,400, with the overall market sentiment becoming cautious. In such turbulent times, should one watch and wait, or buy on dips?
⸻
Global tensions are rising, and capital is beginning to withdraw.
This market downturn is driven by severe turbulence in global trade conditions. The renewed trade war between the US and China has sparked a capital flight, affecting the trend of risk assets. The Federal Reserve's tightening policy has also intensified market liquidity pressure.
Bitcoin, which was once regarded as 'digital gold', has not successfully hedged market risks during this volatility, instead falling in sync with traditional risk assets, reflecting the market's extreme sensitivity to short-term liquidity.
⸻
Short-term trading: Risk management is key.
Don’t rush to catch the bottom; stabilize your position first.
Currently, it is not suitable to enter the market heavily. It is recommended that investors adopt conservative strategies, including:
• Reduce leverage and decrease exposure to high volatility risks;
• Set a stop-loss point (10~15% is advisable);
• Observe macro signals, such as US Treasury interest rates and policy direction, to avoid emotional trading.
If you really want to enter the market, it is advisable to adopt a 'partial accumulation' approach to avoid placing a heavy bet all at once, which may turn you into a knife catcher.
⸻
Medium to long-term layout: Crisis creates opportunity.
Despite the short-term turbulence, the long-term fundamentals of blockchain remain resilient:
• The correction of mainstream coins creates opportunities: If Bitcoin, Ethereum, and other fundamentally supported coins experience an expanded decline, it may be the right time for long-term investors to position themselves.
• Dollar-cost averaging (DCA) strategy returns to the spotlight: For investors who are not adept at swing trading, DCA is an effective method to navigate through bull and bear markets.
• Pay attention to institutional movements: Although institutions like MicroStrategy face paper losses, their long-term Bitcoin holding attitude remains unchanged. Institutional buying often signals the early stages of a bull market.
⸻
Conclusion: After the turbulence, only the real players remain.
The crypto market has never been a smooth path but a challenging training ground. This correction is both a risk and a test of your operational discipline and faith.
Staying calm in fear and learning to restrain oneself in greed are the true weapons to survive a bear market.
Hold your bullets, stick to your principles, and we will meet again in the next bull market.
