In the cryptocurrency market, the main force profits through accumulation and distribution, and the on-chain holding behavior must change during this process. The core of the trading strategy lies in how to capture the behavior pattern of the main force through data. For example, during the accumulation period, the main force will exhibit specific on-chain behaviors, and these behaviors can be aggregated and converted into trading signals.
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However, when more people adopt similar strategies, the main force may adjust their strategies or even hide their behavior. Therefore, the effectiveness of the trading strategy needs to be constantly adjusted and optimized to identify the possible hidden behavior of the main force, which is an ongoing game.
Focus on the opportunities for capital rotation in the market
The cyclical changes in the cryptocurrency market have a significant impact on the execution of trading strategies. From a macro perspective, the focus of capital may differ in different periods:
Rotation of mainstream coins: Capital may be concentrated on mainstream assets such as BTC and ETH, at which time on-chain liquidity is scarce and trading volume is relatively small.
Switching of emerging public chains and hot spots: The ecological hot spots may switch between public chains, such as the recent transfer from ETH to Base, BSC, and then to Solana. Solana has become a breeding ground for high-frequency trading and innovative projects due to its high TPS and low Gas fees.
Meme track and narrative change: In more niche tracks, such as Meme tokens, capital will also rotate due to updates in launchpads or changes in narratives. For example, from the high-frequency PVP market on Solana to the new projects on the Base chain, the focus of market capital is constantly shifting.
Real-time monitoring of on-chain trading volume and capital flows can assist decision-making. For example, the recent capital rotation indicates that the virtual economy (such as AI Agents, Virtuals) on emerging chains has become a hot spot, which suggests the need to adjust positions in a timely manner and follow the capital flow.
You must have your own trading strategy
The bull market provides a lot of opportunities, but also comes with high risks. In such a market, it is particularly important to remain calm:
Independent judgment: Trading should be centered on verifying the strategy, rather than catering to market sentiment. The emotional fluctuations in the bull market can easily lead traders to be misled by the "eternal bull market" narrative, resulting in excessive optimism.
Timely profit-taking: One of the traps in the bull market is "unwilling to sell". Even if the market is rising, taking partial profits is key to maintaining long-term advantages. Even if you miss higher price points, controlling risk should always take priority over chasing higher returns.
Support of stable cash flow: Cash flow is the cornerstone of calm trading. Obtaining stable cash flow through main business or quantitative funds can reduce the dependence on short-term market fluctuations, making trading more composed.
In the bull market, traders often face anxiety, fear of missing opportunities, underperformance of returns, and psychological fluctuations caused by short-term drawdowns.
For this, there are also corresponding coping methods:
Focus on the trading framework: Transactions outside the framework, even if profitable, are not considered successful. The core of trading is to verify the strategy and refine the cognition, rather than the temporary gains.
Establish a calm communication environment: Avoid being disturbed by emotional signals, and maintain communication with calm and rational trading partners. Especially in the bull market, the overheated emotions are easy to trigger irrational decisions.
Remember the cyclicality of the market: The bull market is not "eternal", but a cycle of opportunities and risks. Even with a strong bullish sentiment, risks need to be vigilant, especially when the market only shows a single narrative without clear supporting logic.
Although Bitcoin enjoys the title of "digital gold", it also always hides high risks. Whether you can seize the opportunity and smile at the next wave of rise depends on the mastery of the market pulse. I hope that everyone can make a fortune in the new year, but remember to take profits in time, as the real "Altcoin season" will come after Bitcoin tops, but you must exit the market before the end of 2025, as a bear market may arrive in 2026, with prices possibly dropping 80% to 90%.
