Introduction

Today, Bit fell below $89,000 in the short term, reaching a low of $88,200, and ETH and SOL also fell below $2,400 and $135 respectively. Even within 1 hour of the plunge, the total liquidation amount across the network reached $454 million.

In such extreme market conditions, investor sentiment and decision-making become crucial. The KOLs (key opinion leaders) with large fan groups on social media often unconsciously influence the market trend with their words and actions. In today's plunge, these KOLs reacted differently. Some released in-depth analysis of the market and took a bearish view; some expressed a patient waiting attitude; and some chose to protect their capital through decisive stop-loss strategies. These different voices and strategies reflect the KOLs' different thinking when facing drastic market fluctuations, and also provide investors with different references.

Top-Selling Type

At the market's peak, being able to accurately judge the top and sell out in time to avoid subsequent losses is almost every investor's dream. By keenly observing market data and in-depth analysis, some KOLs have successfully achieved this, accurately identifying the signs of market overheating and making corresponding decisions.

For example, Mr. Beg (@market_beggar) issued a warning as early as January 13 through on-chain data such as "Realized Profit", AVIV heatmap, and Cointime price deviation, indicating that the market was already in an overheated state. His core view is that the market top usually goes through two obvious "distribution" stages. Each bull market will have a large number of investors quietly accumulating positions at low levels, and the distribution of these positions is a signal that the bull market is gradually coming to an end. When market sentiment reaches its peak and participants generally hold positions at high costs, once the price can no longer continue to rise, the selling pressure will gradually emerge, ultimately triggering a price decline and the beginning of a bear market.

Two "Distribution" Signals

Mr. Beg pointed out through on-chain data models that there are two distribution signals before each market top. The first distribution appears in the early stage of the market, when a large number of low-cost positions start to flow into the market as the price rises. After the price pullback, the market sentiment gradually recovers, and the bottom-fishing capital enters, pushing the market into the second distribution stage. At this time, a large number of "high-price bag holders" begin to be under pressure, and if the price fails to continue to rise or starts to fluctuate, this part of the high-cost holders will aggravate the selling pressure, further triggering the decline.

How to Identify Top Signals?

Mr. Beg's top judgment model dynamically adjusts through multiple on-chain data, including Realized Profit, AVIV Heatmap, and Cointime Price Deviation.

• Realized Profit: When the market price broke through $70,000, there was a clear profit-taking signal, marking the beginning of the first distribution. As the price broke through $100,000, the second distribution appeared again, and the market began to show more selling pressure.
• AVIV Heatmap: This heatmap can help us observe whether the market is in an overheated stage. When the market reached its peak, the AVIV indicator showed signs of overheating, and this phenomenon appeared again when it broke through $100,000, indicating that the pressure of the second distribution had accumulated.
• Cointime Price Deviation: Mr. Beg tracked the historical tops through this model and found that each cyclical top was accompanied by two obvious peaks, and the current market is also in the second peak stage, and has shown signs of turning.

Similarly, Calm Calm Again (@hexiecs) also made a similar judgment on January 20. He pointed out that the issuance of cryptocurrencies by the wife of former President Trump was a clear signal of a local market top, so he decisively cleared his positions, selling 90% of his BTC and exiting his TRUMP position. In retrospect, he said that if it weren't for this signal, he might not have made such a decisive decision. He also mentioned that although he tried to obtain higher returns through on-chain operations, in the market environment of liquidity shortage, the rapid PVP (player-to-player) transactions have almost left no way out for veteran players.

Arthur Hayes also expressed similar views in his recent articles and tweets. He believes that since the US political environment has not fundamentally changed due to Trump's election, the price of cryptocurrencies may retrace to the level of Q4 2024. He pointed out that many IBIT holders are actually arbitrage funds, who profit by going long on ETFs and short on CME futures, but once the BTC price falls, they will sell IBIT and repurchase CME futures, which may further drive the BTC price down, even to $70,000. Arthur Hayes believes that only the Federal Reserve, the US Treasury Department, or other countries through some form of monetary easing policy can effectively improve the current market situation.

Through in-depth analysis of the market and keen insight into the macro environment, these KOLs have successfully avoided the top-end risks of the market, providing investors with important signals about market changes.

Stop-Loss Type

When the market is declining, timely stop-loss is the key strategy to protect the principal. Although stop-loss often means short-term losses, being able to execute this operation decisively can effectively reduce losses and demonstrate the investor's ability to remain calm in turbulence.

Setting 10 big targets is a typical example. When the market was declining, he quickly closed his long positions, although this resulted in a loss of billions of dollars. It is worth noting that he had set a clear stop-loss line a few days ago, and once the market reached that line, he would immediately execute the close-out. This strict risk management approach reflects his high emphasis on trading discipline. He mentioned on social media that although stop-loss brings immediate losses, he believes that acknowledging failure and stop-loss in time is the necessary path to protect capital and avoid greater losses. The most dangerous thing in the market is not failure, but ignoring the signals of failure and harboring a lucky mentality, ultimately leading to more serious losses.

In his analysis, he emphasizes a core principle in trading: react quickly and decide decisively. Facing the drastic market fluctuations, only by calmly responding and quickly adjusting the strategy can the risk be avoided to the greatest extent. And this calm decision-making ability also comes from a deep understanding of market trends and self-awareness.

Calm Type

In the drastic market fluctuations, some KOLs choose to remain calm. They usually take a longer-term view and believe that short-term fluctuations are just normal phenomena in the market cycle and do not need to overreact. For these KOLs, patience and determination are the keys to success, and they are often able to maintain clear judgment amidst the market noise.

Raoul Pal recently tweeted to remind everyone: "You need to learn patience... It's like 2017, Bit went through five corrections, each over 28%, and most corrections lasted 2-3 months before the market hit new highs. Much of what you're worried about is just noise." By reviewing historical trends, he tells investors that market corrections are normal and there is no need to panic excessively, as patience and waiting are the wise choices.

Kevin Svenson also shared a similar view. He pointed out that although the current market sentiment is leaning towards panic, the trading volume of Bit has been declining since November last year, and he believes this indicates that the market may be approaching the bottom, and the next breakthrough in trading volume is likely to occur during the rebound period. "The current panic sentiment has caused people to overlook an important signal - the trading volume has not increased with the drop in prices, which indicates that the selling pressure in the market may have peaked."

Ansem also believes that although Bit has currently fallen below the support level and broken through the trading range of the high time frame, there is still no obvious breakdown of the bearish range, so he believes that this round of decline may only be part of the market adjustment, and the overall trend has not changed. His analysis is more cautious, but he also mentioned that if the stock market also experiences a decline in the next few weeks, this is likely to mean that the market's risk aversion sentiment is spreading, which may lead to a larger market downturn.

Finally, CZ forwarded a tweet, emphasizing the necessity of long-term investment. The tweet mentioned: "On the same day last year, the price of Bit was $54,000, ETH was $3,178, BNB was $401, and SOL was $109. Now, all these coins have risen, and three of them have recently hit new highs. Short-term vision often makes us only see the price fluctuations, but if we extend the perspective, we can see more opportunities." CZ used this to remind investors not to be disturbed by short-term price fluctuations, but to take a broader view of the market and seize long-term investment opportunities.

Summary

In extreme market conditions, the reactions of KOLs are different, but whether it is successfully escaping the top, decisively cutting losses, or remaining calm and unruffled, their decisions reflect a deep understanding and unique judgment of the market. The KOLs who escaped the top avoided market risks through precise data analysis, the KOLs who decisively cut losses protected their principal through stop-loss, and the KOLs who remained calm and unruffled stabilized their investment rhythm through patience and long-term perspective.

For ordinary investors, the most important thing is to always be vigilant and avoid blindly following the trend due to short-term fluctuations. The violent fluctuations in the market may cause us to make emotional decisions, but no matter what, maintaining calm, rationality, setting a stop-loss line and strictly implementing it is the key to avoiding greater losses. If you encounter situations like liquidation, you should immediately stop trading to avoid further expanding losses due to impulsive decisions. The future market is full of uncertainty, and any investment decision needs to be more cautious, and should not make exaggerated reactions due to short-term ups and downs. Only in calmness can we make decisions that truly fit our risk tolerance.