Original | Liu Jiaolian
Overnight, BTC plunged to 58.3k. It seems to be a fierce dive, but in fact it has not yet reached the local low of 56.5k on May 1. On Monday, the internal reference of the teaching chain analyzed several reasons for the sudden plunge in the crypto market. Macro factors, meso factors, and micro factors. Now, BTC is just testing the lower edge support of the sideways channel since March this year.
If we apply the strategic phase analysis theory of On Protracted War, what stage is it now? Jiaolian believes that it is the stage of long-short strategic stalemate.
The strategic stalemate stage is very tiring. The stalemate is that it is difficult to distinguish between long and short positions, and it is easy to fall into a stalemate of not being able to win after a long time. The reason why it is difficult to distinguish between the winner and the loser is that the strategic stalemate stage has the following three characteristics:
First, the forces of both sides in the strategic stalemate are relatively balanced. The bulls cannot form a crushing advantage over the bears, and the bears cannot form a crushing advantage over the bulls. Second, for a long period of time, neither side can defeat the other, and there is no distinction between victory and defeat. In other words, the bulls and bears are tug-of-war back and forth, pulling to the limit. Third, both the bulls and bears are full of strong confidence in their own victory, so both sides can have great strategic resilience, defend their positions, and resolutely not surrender.
The current stage is an important stage in which the power law regression line crosses the strategic stalemate zone obliquely upward, and it is also a key stage in which the strategic forces of both long and short sides quietly reverse. At this stage, the market will gradually complete the transition from short advantage to long advantage. When the long advantage gradually accumulates and surpasses and crushes the short advantage without anyone noticing, the overall struggle situation will reverse. When the long-short strategic stalemate stage turns into the long strategic counterattack stage, the bull market will truly start.
However, in the stage of long-short strategic stalemate, pessimism about the current situation is most likely to emerge. At the Liu Jiaolian Planet VIP mid-year private board meeting on June 16, 2024, a friend asked such a question, saying, how long can the red flag be raised?
Regarding this question, the thoughts of the teacher in "A single spark can start a prairie fire" on January 5, 1930, will give us great enlightenment. The teacher believes that this enlightenment mainly has the following three aspects:
First of all, the first aspect of inspiration is whether there is still a bull market, whether it will come, and whether it will come quickly?
Apart from the shorts as the opposing force and the capitulationists on the long side, the longs who still stick to the market and hold their positions firmly must still believe that the bull market climax is inevitable. However, they may be a little hesitant and doubtful, and do not believe that the bull market climax will come quickly.
This kind of skepticism will cause them to waste the window period of sideways position building before the bull market or adding positions when the market falls. They are even completely frightened by the bearish remarks promoted and advocated by short sellers, such as that BTC will definitely enter a bear market after the Fed cuts interest rates at the end of 2024. Such FUD remarks give rise to fear in their hearts, so they reduce their positions, sell at a loss, and lose their bottom positions.
It is very interesting that before every bull market begins, the market's pessimism and despair about "there is still a bull market" will reach a local high, and the leveraged positions of the short sellers will accumulate to a maximum. When both the psychological space and physical space in the market reach the local maximum, the market will suddenly explode the short leveraged positions with lightning speed and climb to the peak of the bull market on the corpses of the short sellers.
For example, the "94 incident" in 2017 frightened the market to the extreme, and then quickly exploded the shorts, and rushed to 19800 at the end of the year. Another example is at the end of 2020, when people who had just experienced the extremely painful "312" circuit breaker deleveraging, no one dared to think that there would be a bull market. As a result, on the fifth day after the Spring Festival in 2021, it broke through 50,000 dollars, and many shorts were buried.
The root cause of the light-position thinking lies in the failure to truly recognize the world situation that BTC is facing, namely the struggle and game between multiple conflicting and contradictory forces.
If you recognize that BTC is the ultimate asset that all forces and capital must seize in the final stage of the game, then you will understand the importance of the idea of "decentralization"; you will understand why the historical trend of the world moving from unipolarity to multipolarity is the biggest benefit to BTC; you will understand that BTC is at the forefront of the struggle against the hegemony of the US dollar and is an important ally of various anti-hegemonic forces; you will understand the great significance of the widespread holding of BTC by more and more and more dispersed independent individuals; you will understand why BTC has been able to develop so rapidly from zero to a trillion US dollar market value in just 15 years; you will understand that holding private keys (and (Not putting BTC in an exchange or ETF custody) is the true and highest form of holding BTC, and it is also the form that all truly serious holdings of BTC will eventually take; you will understand that determined long-term HODLers (holders, hoarders), rather than speculative traders, are the most important force for BTC's ultimate success, and are undoubtedly an important factor in promoting the bull market climax; you will understand that it is better to have a full position falling than to have a light position or even an empty position and miss it. Adhering to the eight-character formula summarized by the teaching chain, "insist on fixed investment, increase positions when prices fall", is the correct way to seize this major historical opportunity of BTC, and it is also an important way to promote BTC's further success.
Secondly, the second aspect of inspiration is whether to go all in, whether to stick to the eight-character formula, and whether to continue to accumulate BTC positions?
A firmly held, solid BTC base is your greatest confidence and ballast stone to swim against the current, resist the waves, remain invincible, and have the last laugh in the volatile crypto market.
Repeated speculation with a light or even empty position is like what the teacher said: guerrilla warfare without establishing a base, which will not win in the end. The BTC base position is the base in the crypto market. We must not only establish a base, but also continuously expand it. This is the eight-character formula summarized by the teaching chain, "insist on fixed investment, and increase positions when the market falls."
Don’t be greedy and rush. Even if you only add 0.001 BTC each time, over time, your BTC base will continue to grow, and your base will gradually expand. This is the strategic approach of taking steady steps and accumulating small victories into big ones.
This strategy of continuous accumulation of the bottom position and the wave-like development and expansion of the base is undoubtedly correct. This is necessary to establish and continuously enhance the confidence of holding positions, such as the "Eight Characters·Ten Years of Agreement" real-time witness plan launched by Jiaolian last year. This is necessary to create huge difficulties and pressure on shorts, capitulationists, and hegemony supporters, shake their foundations, and promote their internal disintegration. This is necessary to truly emerge and evolve long-term holders (hodlers) and firm believers, and become one of the important forces to defeat centralized hegemonic currencies in the future.
In short, only in this way can we promote bull market climaxes again and again and continue to attract more fresh like-minded people to participate in this great cause.
Finally, the third aspect of inspiration is how fast is “fast” and how fast is “soon to come”?
The teacher analyzed it very clearly: those who overestimate subjective power and underestimate objective power are prone to make the mistake of blind action; while those who underestimate subjective power and overestimate objective power are prone to make the mistake of pessimism.
In the current strategic stalemate, the subjective strength of the bulls is not strong enough, but the objective strength of the bears is also weak. Although after the bear market of 2022-2023, especially at the end of 2022, the 2021 "previous high" of $20,000 was broken, which made many bulls "collectively break defense", but as the teacher said, "a single spark can start a prairie fire", thousands of "persistent fixed investment, increase positions when the price falls", and the accumulation of BTC hoarders, bit by bit, are the most powerful force in this market.
Speaking of the objective power of the shorts, the halving of BTC production in April is like a fire under the cauldron for the shorts. No matter how the shorts clamor, the market crash ultimately depends on real BTC. Whether it is the huge compensation of Mt.Gox or the liquidation of FTX bankruptcy, no matter how much BTC can be shipped, it is a limited number. As long as it is limited and objectively constrained by the powerful computing power of BTC, no one can issue more, then the shipment will always come to an end. This is the essence of the short-selling market crash.
No matter how brilliant the "results" of the shorts are in the form of spot prices, this process is also the process of transferring the spot chips in their hands to the longs, which is actually the process of digging their own graves. Therefore, when we evaluate the objective strength of the shorts, we must not only look at the current form, but also see the essence behind it.
If we can see through this essence, we will never feel pessimistic because of the current plunge of BTC to $60,000 or even breaking through $60,000. On the contrary, we will be very happy about it, because the efforts of the short sellers to smash the market just help us get a cheaper discount price for adding positions!
In the article "Buying Well and Selling Well" on September 24, 2021, Jiaolian once said, "Selling well is very difficult, but all the poor sales can be compensated by buying well. The key is to buy cheaply enough."
In the article "The Dawn of BTC Is Quiet" on August 7, 2023, Jiaolian repeatedly emphasized a simple truth: "A bear market is a good opportunity to build a position. Almost all bull market profits come from the accumulation of bear markets."
In the article "Full Positionism in a Bear Market" on April 9, 2023, Jiaolian wrote, "The longer the bear market lasts, the longer the window for building positions will be, the more solid and heavy the accumulated positions will be, and the stronger the ability to withstand shocks will be."
The less anxious and impatient we are about the bull market coming soon, the more we hope to have more time, more opportunities to increase positions at a discount, and accumulate more positions, the closer the bull market will come.
Because as the contradiction between the bulls and bears becomes increasingly intensified, as the contradiction between the Federal Reserve's interest rate hikes and cuts becomes increasingly serious, and as the contradiction between the hegemonic and anti-hegemonic forces in the world situation becomes increasingly intensified, the strategic counterattack stage will inevitably come quickly.
However, scientific strategic analysis and judgment is not fortune-telling. So-called accurate predictions are nonsense. The teaching chain calls it "The Uncertainty Principle in the Trading Market" (2021.3.20 article). As the teacher said, "The future development and changes should and can only be described in a general direction, and should not and cannot be mechanically determined by the time." However, this so-called coming is "by no means as some people say "there is a possibility of coming", which is completely meaningless and unattainable."
"It is standing on the horizon and looking out to the sea, where one can already see the tip of a ship's mast. It is standing on a high mountain and looking out to the east, where one can see the sun radiating its rays and about to rise. It is a baby stirring in its mother's womb, about to mature."
How should each of us act to promote the arrival of this climax? The instructor clearly pointed out that we only need to do these two tasks:
First, establish a base, that is, establish a BTC base warehouse, and through guerrilla warfare (eight-character formula), continue to expand the base and expand the base warehouse (BTC quantity).
Second, we must strive to win over the masses, that is, through various flexible and diverse forms, we should explain and popularize the correct concepts mentioned in this article and continue to expand consensus.
If every Bitcoiner does these two things well every day, the International will be realized.
These two tasks are exactly what the teaching chain practices every day. Just as the Zhouyi·Qian·Nine Three Yao Ci says, "The gentleman works hard all day long and is vigilant at night. He is vigilant and has no faults."
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
