In the extreme market conditions of violent Bitcoin fluctuations, the different coping strategies of KOLs (Key Opinion Leaders) have attracted much attention. This article will explore their market perspectives and their impact on investor decision-making. This article is from Luke, authored by MarsBit, and reprinted by Foresight News.
(Background: A Chinese KOL Suffered Huge Losses on Bitcoin Contracts! Closed Long Position of 1,783 BTC, Profit Wiped Out by $100 Million)
(Additional Background: Bitcoin Panic Sell-Off, Time to Get In? BTC, ETH Key Support Analysis)

In extreme market conditions, investors' emotions and decision-making become crucial. The words and actions of KOLs with large fan groups on social media often unconsciously influence the market trend.

In today's plunge, these KOLs have reacted differently. Some have released in-depth analysis of the market and expressed a bearish view; some have expressed a patient waiting attitude; and some have chosen to protect their capital through decisive stop-loss strategies. These different voices and strategies reflect the different mindsets of KOLs when facing violent market fluctuations, and also provide different references for investors.

Escape the Top Type

In 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. Through keen observation and in-depth analysis of market data, 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, using on-chain data such as "Realized Profit", AVIV Heatmap, and Cointime Price Deviation to indicate that the market was in an overheated state.

His core view is that the market top usually goes through two obvious "distribution" stages. In each bull market, a large number of investors quietly accumulate positions at low prices, 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 higher costs, once the price can no longer continue to rise, sell orders will gradually emerge, ultimately triggering a price decline and the beginning of a bear market.

Two Rounds of 'Distribution' Signals

Mr. Beg pointed out through on-chain data models that there are two rounds of distribution signals before each market top. The first round of distribution appears in the early stage of the market, when a large amount of low-cost positions begin to flow into the market as the price rises.

With the price pullback, market sentiment gradually recovers, and bottom-fishing capital enters, pushing the market into the second round of distribution. At this time, a large number of "high-price bag holders" begin to be under pressure, and if the price fails to continue rising or begins to fluctuate, this part of the high-cost holders will aggravate the selling pressure, further triggering a decline.

How to Identify Top Signals?

Mr. Beg's top judgment model dynamically adjusts based on 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 round of distribution. As the price broke through $100,000, the second round of distribution appeared again, and the market began to face more selling pressure.

AVIV Heatmap: This heat map can help us observe whether the market is in an overheated stage. As the market rose to its peak, the AVIV indicator showed signs of overheating, and this phenomenon reappeared when it broke through $100,000, indicating that the pressure of the second round of 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 was also in the second peak stage, and had shown signs of turning.

Similarly, Hexiecs (@hexiecs) also made a similar judgment on January 20. He pointed out that Melania Trump's issuance of a cryptocurrency was a clear regional top signal for the market, so he decisively cleared his positions, selling 90% of his BTC and exiting the 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, rapid PVP (player-to-player) transactions have almost left no retreat for old players.

Arthur Hayes has 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 cryptocurrency price 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 shorting CME futures, but once BTC price falls, they will sell IBIT and buy back CME futures, which may further drive down BTC price, even to $70,000. Arthur Hayes believes that only the US Federal Reserve, the US Treasury Department, or other countries through some form of monetary easing policy can effectively improve the current market conditions.

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

Cut-loss Type

In a market downturn, timely stop-loss is a key strategy to protect the principal. Although stop-loss often means short-term losses, being able to execute this operation decisively can avoid greater risks and often effectively reduce losses, demonstrating the investor's ability to remain calm in turbulence.

Setting 10 big targets is a typical example. When the market fell, he quickly closed his long positions, although this resulted in the loss of billions of funds. It is worth noting that he had set a clear stop-loss line a few days earlier, and as soon as the market reached that line, he immediately executed the liquidation. This strict risk management approach reflects his high emphasis on trading discipline. He mentioned on social media that although the stop-loss brought immediate losses, he believes that acknowledging failure and timely stop-loss 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 mentality of luck, which ultimately leads to more serious losses.

In his analysis, he emphasizes a core principle of trading: rapid response and decisive decision-making. Faced with the violent fluctuations of the market, only by calmly responding and quickly adjusting the strategy can the risks be avoided to the greatest extent. And this calm decision-making ability also stems from a deep understanding of market trends and self-awareness.

Calm Type

In the violent fluctuations of the market, some KOLs choose to remain calm, and they usually take a longer-term view, believing 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 noise of the market.

Raoul Pal recently reminded everyone in a tweet: "You need to learn patience... It's like 2017, Bitcoin experienced five pullbacks, each over 28%, and most pullbacks lasted 2 to 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 pullbacks are normal and there is no need to panic excessively, and patience is the wise choice.

Kevin Svenson also shared a similar view. He pointed out that although the current market sentiment is leaning towards panic, Bitcoin's trading volume has been declining since last November, and he believes this indicates that the market may be approaching a 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 - trading volume has not increased with the price decline, indicating that the selling pressure in the market may have peaked."

Ansem also believes that although Bitcoin has currently fallen below the support level and broken through the trading range of the high time frame, there is still no obvious bearish breakout, and therefore 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 may mean that the market's risk aversion sentiment is spreading, which could lead to a larger market decline.

Finally, CZ (Changpeng Zhao) retweeted a post emphasizing the necessity of long-term investment. The post mentioned: "On the same day last year, the price of Bitcoin was $54,000, Ethereum was $3,178, BNB was $401, and SOL was $109. Now, all of these coins have risen, and three of them have recently hit new all-time highs. Short-term vision often makes us only see the price fluctuations, but if we extend the perspective, we can see more opportunities." CZ thus reminds 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 vary, but whether it is successfully avoiding the top, decisively cutting losses, or maintaining calm in the face of turbulence, their decisions all reflect a deep understanding and unique judgment of the market. The escape-the-top KOLs avoided market risks through precise data analysis, the decisive cut-loss KOLs protected their principal through stop-loss, and the calm KOLs 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 crowd due to short-term fluctuations. The violent fluctuations in the market may lead us to make emotional decisions, but no matter what, maintaining calm, rational, setting a stop-loss line and strictly executing it is the key to avoiding greater losses. If faced with extreme situations such as forced liquidation, trading should also be immediately stopped to avoid further expanding losses due to impulsiveness. The future market is full of uncertainty, and any investment decision needs to be more cautious, and should not overreact to short-term ups and downs. Only in calmness can we make decisions that truly fit our risk tolerance.