Yesterday, I had a premonition that Altcoins might enter an adjustment phase, but I didn't expect the changes to come so quickly. After the US stock market closed, large investors in the market began to harvest, causing the price of Bitcoin to drop to around 94,000, and the Ethereum contract to fall below 3,500, while many Altcoins fell by around 30%.
When the money-making effect of Altcoins is good, they are indeed very eye-catching, but this also means that they have great volatility. If you're not careful, the profits you made the previous month may be swallowed up by short-term fluctuations.
Operation strategy after rebound
Based on historical experience, except for the "312" major crash, there will generally be a relatively safe rebound period a few days after a liquidation. If you previously reached your profit target but did not exit, you can now consider taking profits during the rebound. After a large decline, there is usually an automatic rebound process, as some people start to buy the dips, and short positions are also being closed.
However, this rebound will not last too long. So in the next few days, if Altcoins rebound, everyone should not rush to invest again, but should appropriately reduce their positions or lower their leverage ratios according to their profit targets. For those who want to buy the dips, it is recommended to focus on Bitcoin, Ethereum, and BNB, as they are relatively stable, while other Altcoins have greater volatility and higher risks. Of course, the potential returns may also be higher, but the current market still belongs to the left-side position-building. When Ethereum stabilizes above 3,800, you can consider focusing on some high-quality Ethereum ecosystem targets, such as ENS, ENA, LDO, UNI, and AAVE.
Reasons for the adjustment of Altcoins
Based on the liquidation data, this round of adjustment is mainly aimed at Altcoins. Although Bitcoin experienced a wave of decline last Friday, Altcoins started to adjust today. Many people, like me, may have expected a few more days of adjustment, but the market's response is often unexpected. Perhaps the big players had already anticipated everyone's expectations and acted before everyone else.
Regardless, as I said yesterday, the market will definitely have a second wave, especially with Ethereum's upgrade next year, which may bring speculative opportunities. Therefore, the focus in the future will still be on Ethereum and Ethereum ecosystem targets.
Don't panic excessively, control your position size
Don't panic excessively due to the market decline. I personally experienced a much greater panic during the big drop on August 5th, so this adjustment is not as severe. After a short-term adjustment, the market still has the opportunity to rebound.
Remember to reduce your positions if necessary, and lower your leverage if needed. Money is not made in a single day, but if your leverage is too high, you are easily vulnerable to being harvested by market whales. Controlling your greed is very important, no matter how confident you are, don't go cross margin or use high leverage. The market is always full of uncertainties, and no one knows how it will go.
Current operation suggestions
For short-term operations, my suggestion is to buy and sell quickly, don't do trend trades anymore, otherwise you are easily swept out of the market by short-term fluctuations. In the spot market, focus on high-quality Ethereum ecosystem targets, such as ENA, OP, ENS, LDO, AAVE, UNI, and LQTY. Those seeking stability can continue to focus on Bitcoin and BNB.
In general, Ethereum below 3,600 can be considered for ambush, and the price below 3,500 has a high cost performance. My focus is on deploying ETH, but mainly for swing trading, and I may wait for Bitcoin to adjust before considering trend trades.
Finally, there are still many things that haven't been written down, such as specific opportunities and specific decisions, which are often not something that can be summarized in a single article.
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