In the cryptocurrency market, many investors harbor the beautiful vision of selling in a bull market and buying at the bottom in a bear market. However, the harsh reality is that the definitions of bull and bear markets are often only clearly discernible in hindsight. During the actual operation of the market, it is very difficult for us to accurately judge the current stage we are in. Without reliable judgment criteria, the so-called selling in a bull market and buying at the bottom in a bear market becomes an unattainable fantasy.
Some may argue that specific prices can define bull and bear markets, such as Bitcoin reaching $100,000 being a bull market, and $70,000 being a bear market. However, this viewpoint is overly simplistic and one-sided. How should we define the market when the price rises to $150,000 or $200,000? How should we explain it when it drops to $50,000 or $60,000? In reality, those who can successfully sell in a bull market and buy at the bottom in a bear market often rely more on luck than on precise judgment and strategy.
In the cryptocurrency market, investors can truly control only two actions and one variable: buying, selling, and the quantity of each transaction. Besides that, the market's trends, price fluctuations, and many other factors are beyond our control. From a hindsight perspective, when Bitcoin is priced at $100,000, it seems one should decisively sell. But when should one buy at the bottom? This remains an unknown. When the price falls from a high of $50,000 to $20,000, we might think that a range of $50,000 to $80,000 is an appropriate buying zone. However, until the price actually reaches this range or until an upward trend starts, we can never determine the best timing to buy at the bottom. Thus, the notion that 'sell in a bull market, buy at the bottom in a bear market' is an erroneous concept in practical operations. Wrong concepts lead to wrong perceptions, which in turn trigger wrong behaviors, ultimately making it exceptionally difficult to earn money in the crypto market.
There is a clear pattern in the cryptocurrency market, which is rapid rises followed by slow declines. Taking Bitcoin as an example, the process of rising from $15,000 to $100,000 seems to be a continuous climb, gaining momentum. However, in reality, true surges often concentrate in just a few days, while most of the time the market remains in a state of fluctuation. After a period of oscillation, rapid increases will then occur. If investors do not hold continuously, they will find it challenging to keep up with this fast-paced rise, similar to missing a suddenly accelerating vehicle, making it hard to catch up.
When a bull market ends and a bear market quietly arrives, the transition is even harder to perceive. For example, when the price of Bitcoin is at $80,000, many altcoins may have already dropped by 70%, but they could continue to decline by another 50%. During the price decline, many investors, even when they see losses, are unwilling to sell and prefer to be deeply trapped. This is because the declines in the cryptocurrency market are usually slow. Suppose an investor invests 1 million yuan, and after the price rises to 3 million, it starts to fall. When it drops to 2.7 million, the investor may still hold onto hope, thinking about selling when it rises back to 3 million. As a result, the price rebounds to 2.8 million and then continues to drop to 2.5 million, at which point the investor hopes to see it rebound to 2.8 million before selling. However, the price keeps falling to 2 million, and the investor decides not to sell. Later, when the price rises to 1.5 million, the investor may have become numb and not want to pay attention anymore. As the price further drops to 500,000, then rises to 700,000, the investor reluctantly accepts reality and chooses to continue holding. Throughout this process, with each price rebound, the investor hopes to return to the original high, but the market has already changed significantly.
The market does not decline rapidly because the market makers hold a large number of coins, and if they were to sell all at once, it would be hard to achieve good prices. Therefore, they can only sell slowly, using favorable market news to do so. Catastrophic crashes are often triggered by chain reactions. For experienced and bold investors, such crashes can present opportunities for profit, as rebounds usually follow shortly after a plunge. However, this slow decline process can be extremely torturous for investors, especially for altcoins. If prices fall sharply in a panic, investors may sell at a loss out of fear. In reality, altcoins rarely experience such rapid crashes; they mostly fluctuate between rises and falls. For example, a coin that initially costs 10 might suddenly drop to 1 after six months, a drop of 90%, while investors often remain oblivious during this process. This is mainly because investors lack professional training and are not sensitive enough to the trend of price declines, which is fundamentally why beginners find it difficult to make money in their first investment cycle.
When investors experience a complete investment cycle and enter a second cycle, if they continue to engage with altcoins, they will be more alert to abnormal market declines due to the experience they have gained and past losses. For example, when investment returns reach tenfold and the price falls to sevenfold, investors will decisively sell and no longer hold fantasies of higher returns. This cognitive shift cannot rely solely on reminders from others; only by personally experiencing losses and cutting losses can they truly grasp it. From the initial pain of cutting losses to the numbness during the second time, to the calmness during the third time, and finally the ease of handling it during the fourth time, investors gradually mature. At this point, any altcoin would find it very difficult to put investors in a passive position; once risks are detected, investors will quickly cut losses and exit.
The market trends in the cryptocurrency sector actually align with human nature. People desire rapid price increases, so the market occasionally experiences unexpectedly fast surges; they also wish for slower declines, hoping prices can rebound, resulting in a gradual downward trend. However, those investors who see through human nature remain calm in the face of rapid surges and stay highly alert during slow declines. Once there is any hint of market movement, they react swiftly and exit in time. Those who remain in the market often become the ones left holding the bag, still dreaming that their altcoins will rise again, while in reality, the market has already completed a wealth transfer through previous trends, and this process is silent. Only investors who undergo deliberate training and have a profound understanding of the market can discern the intricacies within, thus profiting from the market’s bubbles.
