In the cryptocurrency market, the investment strategy of 'cashing out in bull markets and accumulating positions in bear markets' sounds appealing, but is fraught with challenges in practice. Determining whether the market is in a bull or bear phase is not easy; defining bulls and bears solely based on price fluctuations is clearly an oversimplification. Most so-called successful swing trades largely rely on luck. What investors can truly control is limited to trading decisions (when to buy, when to sell, and how much to trade), while key factors such as market trends and price fluctuations often lie beyond personal control. Consequently, this idealized investment philosophy can easily mislead in practice, leading to biased investment decisions.
The price trends in the cryptocurrency market exhibit a distinct 'sharp rise and slow fall' characteristic. Taking Bitcoin as an example, during its rise from $15,000 to $100,000, most of the increase occurred over just a few trading days, while the rest of the time saw sideways fluctuations. If investors exit midway, they may miss the most critical upward momentum. After entering a bear market, the market becomes more concealed, with prices typically adjusting through slow declines. Faced with paper losses, investors often harbor a wishful thinking mentality, hoping for prices to rebound to break even, thereby missing stop-loss opportunities and eventually falling into deep entrapment amid ongoing fluctuations. When the market makers sell off at high prices, they usually do so gradually with favorable news until panic spreads, leading to a sharp drop. Although rebounds after a sharp decline may present opportunities, the prolonged downward trend is highly testing, especially for altcoins, whose slow downward movements can easily cause inexperienced investors to overlook risks, making it difficult for the first investment cycle to achieve profitability.
After experiencing a complete investment cycle, investors who still choose to participate in altcoin trading become more sensitive to abnormal price fluctuations due to lessons learned from losses and cutting losses, allowing them to execute profit-taking and stop-loss strategies in a timely manner. This cognitive shift often comes at a cost of real money, moving from the initial anguish of facing losses to gradually learning to respond rationally, marking the maturation of investors in trading mentality and operational strategies.
The price fluctuations in the cryptocurrency market are essentially a reflection of human nature: rapid rises cater to people's desire for short-term profits, while slow declines satisfy investors' fantasies of price recovery. Mature investors can perceive the logic behind the market's surface, maintaining rationality during rapid price hikes and decisively exiting when the initial signs of a downward trend appear. In contrast, those who react slowly often become the ones buying at high prices, suffering losses during the wealth redistribution process in the market. Only investors who have undergone systematic training and deeply understand market operating rules can seize opportunities amid market fluctuations and achieve stable profits.
