Markets are born out of despair, grow in hesitation, and die in revelry. As an old veteran who has experienced several rounds of bull and bear markets, I want to share some different thoughts.
Looking at the fluctuations on the screen, I think of the DeFi summer frenzy in 2020 and the NFT madness in 2021. Every bull market seems to present opportunities everywhere, but in reality, traps often outnumber opportunities. Data shows that even in a rapidly rising market, more than half of investors still fail to outperform the market.
In the current market, Bitcoin has entered a phase of consolidation and volatility, with hot sectors rotating rapidly, causing many people to feel anxious. Today, I will share my experience on how to stay clear-headed in a bull market atmosphere.
1. My response strategy during the Bitcoin washout period
Recently, the volatile market of Bitcoin has made many newcomers nervous. However, market fluctuations are a normal phenomenon in a bull market. The main players use rapid price increases and decreases to cleanse indecisive holders, thereby solidifying the foundation for subsequent trends.
In the face of such a market, my strategy is very simple:
First, never easily give up low-position assets. The essence of a washout is a psychological battle; the main players want you to sell in panic. Once you understand this, you will find that short-term fluctuations actually provide better entry opportunities.
I usually pay attention to key support levels. For example, when Bitcoin tests a previous area of concentrated trading (such as around $38,000) and shows a volume rebound, I consider adding positions in phases. Remember, in an upward trend, the risk of buying on a pullback is relatively low.
Secondly, I strictly implement position management. I do not exhaust all my funds at once, but rather use a phased accumulation strategy. For example, after confirming effective support, I invest 30% of my funds initially, then add another 20% each time the price drops by a certain percentage. This way, I neither miss the opportunity nor lose control of costs.
Most importantly, in a sideways market, I insist on buying near the lower edge of the range and considering reducing positions near the upper edge. This strategy seems simple, but it requires overcoming the instinct to chase prices and panic sell.
2. In a bull market, how to find the right rhythm?
A bull market is not about equal distribution, but rather a structural rotation. Different stages of a bull market have completely different leading sectors.
In the first phase of a bull market, most stocks (cryptocurrencies) will rebound from the excessive suppression of a bear market, and at this time, high-risk assets often perform the best. This is why some small-cap cryptocurrencies often outperform the market in the early stages of a bull market.
When the market enters the second phase, capital begins to focus on growth potential. At this time, the best performers are often growth assets supported by actual performance. For example, sectors like AI, robotics, and semiconductors in the current market are favored by capital due to their growth potential.
By the third stage, the market will become more discerning. At this point, it is necessary to sell secondary stocks that have risen too much and shift to high-quality leading assets. As some institutions currently point out, while the overall market valuation still has room, certain sectors such as semiconductors and TMT are already at relatively high valuation levels.
My experience is: do not chase every hot spot, but choose two or three main lines that you truly understand, study them deeply, and hold on. The biggest fear in a bull market is frequently switching tracks and ultimately picking up sesame seeds while losing watermelons.
Three key principles of investing in a bull market
1. Position management is more important than timing
In a clearly defined bull market phase, the greatest risk is not a pullback, but missing out. Frequent position adjustments attempting to 'buy high and sell low' are very difficult in practice and can easily lead to mistakes on both sides.
My personal approach is to maintain a relatively high equity position (usually around 70%), neither fully invested nor fully cash, leaving some flexible funds to respond to volatility. This allows me to participate in market uptrends while having funds available when opportunities arise.
2. Distinguish between 'true growth' and 'false narratives'
In a bull market environment, various projects will tell captivating stories. But true investment opportunities must be based on the certainty of performance growth.
I pay particular attention to projects that have actual products in place, stable cash flow, and clear profit models. In the bubble of a bull market, 'good companies' do not equal 'good stocks', and good companies also need good prices. For assets that have already surged significantly and are clearly overvalued, I remain cautious, no matter how compelling the story is.
3. Stay calm and avoid emotional decisions
The bull market is most likely to trigger investors' FOMO (fear of missing out) emotions. But history shows that the market is in a sideways phase most of the time, with one-sided trends accounting for only about 20%.
I set a rule for myself: to only check the market once a day, reducing frequent operations; before each trade, I write down the decision logic to avoid impulsive trading. Research shows that investors who consistently record trading logs can reduce their emotional decision-making error rate by 40%.
Conclusion: The bull market is a platform for wealth redistribution.
A bull market is not a market where everyone can make money, but a process of wealth transferring from the impulsive to the patient, from the ignorant to the rational.
True investment experts are not those who take risks during wild price fluctuations, but those who can remain calm amid market noise, grasp the main line in sector rotations, and hold their positions during washouts.
Currently, there are still many opportunities in the market. Consumption, Hong Kong tech stocks, and new productive forces are still favored by many institutions. But importantly, it is about finding an investment rhythm that suits oneself, avoiding greed and panic, and maintaining one's views amid the noise of the bull market.
Only when we are no longer influenced by the market's short-term fluctuations and focus on real value creation can we gain our share of profits in this bull market, rather than becoming a footnote to someone else's success. Follow Bin Ge to learn more firsthand information and cryptocurrency knowledge, precise points in the market, and become your guide in the crypto world; learning is your greatest wealth!#瑞典上线VIRBNB #美国伊朗对峙 $ETH
