The three major logics of human prediction of the future and understanding of the world: analogy, induction, deduction.
Analogy: Judging based on the premise that two things have some similar attributes, leading to the conclusion that their other attributes are also similar. For example, you and she are both women; she can give birth, and so can you. Induction: A thinking method that generalizes from individual facts to common characteristics, for example, the sun rose in the east yesterday, so it will rise in the east today. Inductive reasoning is the foundation of human understanding of the world. Deduction: A reasoning method from general to specific, for example, everyone dies, you are a person, so you will die too. In the stock market, foreign exchange, futures, and cryptocurrency space, there is a super basic consensus called 'K-line', which plots price trends into K, and based on past price trends, predicts future markets. People firmly believe that technical analysis is very useful, and indeed many have become wealthy through technical analysis.
So the question arises, what will happen if people all know the answer? The past trends of cryptocurrencies can be divided into three phases:
Bull market with continuous rises, followed by fluctuations and adjustments, and then continuing to rise.
Plummet (consecutive halving)
Sideways fluctuation, continuing into the next round of the bull market.
Anyone with a bit of intuition can see that as long as it is a bull market, investing blindly will definitely yield profits. As long as there are multiple halvings after a major drop, blindly buying at the bottom will definitely result in huge profits. The main capital understands the rules of continuous rises in a bull market, and at this time, they will sell at high positions to realize profits, thus leading to a major drop in the bull market. When most people use high leverage to go long, when the price drops this time, countless people will get liquidated. The consensus of the bull market is still there, and after the plummet, it will quickly rise back. Therefore, the unique feature of this bull market is: fluctuating upward.
Based on past trends, people have realized that after multiple halving bottoms, directly buying at the bottom can lead to wealth. Therefore, some people will buy in advance, causing the predicted bottom price to rise. Currently, it has not plummeted, and I can assure you that the major drop that will happen soon will not experience consecutive halving as before, nor will it touch the bottom price of the previous round.
When everyone knows the future, the future will change. Truly effective predictions are not about carving a boat to seek a sword, but about dynamic forecasting. 1. In an open market, people can predict the future based on past patterns. 2. People will respond based on the predicted future, and this feedback will affect the future.
3. Adjust your behavior according to the affected future, that is, predict the future of the future, so that you can get closer to the truth. Can you make money this way? Wrong. If your strength is too strong, your behavior itself will interfere with the future, and the prediction will still fail. Only weak individuals, whose strength is insufficient to affect the future, can make a fortune by fishing in troubled waters.
For example: If a cryptocurrency has been stagnant for a long time and everyone thinks it is garbage, after everyone desperately sells off their chips, if the main force raises the price again, if the rise is not to short-sell and is instead to go higher, then the rise would be meaningless. The main force is not a philanthropist; the purpose of their rise is definitely to make money.
Just like this wave, if the main force is dynamically raising the price, it is definitely not to sell at a higher price, otherwise it would not rise.
In fact, making money in the cryptocurrency space is much easier than in the A-share market because there are many wealthy people, strong main forces, and a large number of retail investors. The main point is that people in the cryptocurrency space have a strong desire for profit. Therefore, these three points make it easy to make money.
Understanding the relationship between large investors + retail investors + small retail investors allows you to easily navigate through the cryptocurrency space without greed, making a monthly profit of 200,000 to 300,000.
