How to grasp the buying and selling opportunities in the cryptocurrency market?
1. Look at the technical aspects:
Moving Averages (MA)
Buy point: Short-term moving average (5-day line) crosses above the long-term moving average (20-day line), for example, when BTC breaks through the 20-day moving average.
Sell point: Short-term moving average crosses below the long-term moving average, for example, when ETH breaks below the 5-day moving average.
Support and Resistance Levels
Buy point: Price drops to historical support level (e.g., BTC has repeatedly stopped falling at $25,000).
Sell point: Price rises to historical resistance level (e.g., ETH has repeatedly encountered obstacles at $2,000).
MACD Golden Cross / Death Cross
Buy when the golden cross (white line crosses yellow line) occurs, sell when the death cross (yellow line crosses white line) occurs.
2. Look at market sentiment:
Fear and Greed Index
Sell when greed value > 70 (for example, when BTC rises to $60,000 in 2024, the index reaches 85).
Buy when fear value < 30 (for example, during the 2022 bear market, the index repeatedly fell below 20).
Sudden change in trading volume
If a coin's daily trading volume suddenly doubles, it may be a signal for institutional entry, which can be followed.
Sell when there is a continuous decline in trading volume during an upward trend (as there is no capital support, it is easy to fall).
3. Look at the fundamentals:
Major positive / negative news impact
Buy before positive news: For example, the price of ETH often rises in advance one month before the upgrade.
Sell when positive news is fully priced in: For example, after a coin is listed on a major exchange, it often experiences a “sell the news” effect.
Halving cycle
BTC halves every 4 years, easy to rise 6 months before halving (e.g., before the halving in April 2024, BTC rose from $16,000 to $40,000).
4. Iron rules:
Do not chase high prices or panic sell.
Do not buy after 3 consecutive days of rising; do not sell after 5 consecutive days of falling (to avoid being washed out by short-term fluctuations).
Buy and sell in batches.
Buy in 3 batches: buy 1/3 when it drops 10%, buy another 1/3 when it drops 20%, buy the last 1/3 when it breaks the support level.
Sell in 2 batches: sell half when it rises 50%, sell all when it breaks the previous high.
Set stop losses and take profits.
Stop loss: decisively sell when it drops 15% below the purchase price.
Take profit: take profits in batches when earning 30%-50% (can be relaxed to 100% in a bull market).
Ultimate mantra:
Buy big when prices drop, buy small when prices fall; sell when positive news is realized, buy when negative news is fully priced in; when others are greedy, I run away; when others are panicking, I pick up the chips!