Author: Day, vernacular blockchain
The overall market performance has been good recently, with Bitcoin exceeding $42,000 and Ethereum exceeding $2,200. Some time ago, I could see various screenshots of getting rich in the community every day, which could easily cause people to get FOMO, and then they would rush in and settle the accounts, only to find that they might still be losing money overall, let alone outperform Bitcoin or Ethereum.
As an old leek who has been in the industry for more than six years, I have gone through a complete bull and bear experience and summarized some experiences for surviving in the bull market . Even if it is of some use to you, this article is of value. After all, Knowing and doing are not the same thing. There are some truths that even if you have never stepped on the trap, you will not feel it even if you hear it too many times. In addition, when individuals are overwhelmed by public emotions, few people can stay rational.
01 Only a few people make money in the bull market
Bull market is a relative concept, which refers to the situation in the cryptocurrency market where the price of cryptocurrency continues to rise. In this market environment, investors are generally optimistic about the prospects of cryptocurrencies, and they believe that the value of cryptocurrencies will continue to grow.
Why are cryptocurrency prices rising? When the amount of buying orders is greater than the amount of selling funds, the price will naturally rise. No matter what the benefits or technical support are, the final analysis is that there are more funds entering the market. The bull market in 2017 was due to an increase in the number of participants in the industry, and around 20 years was due to the entry of a large number of institutions and the release of funds from the central bank. The current view in the crypto industry is that bull-bear transition occurs every four years. This rule has not been broken yet. As for what will cause the entire market to heat up next time, it is still unclear.
Does the Bull Market Need a Survival Guide? Shouldn't you be picking up money everywhere? It seems that the bull market is coming and everyone is picking up money. Everyone likes to look back on the past bull markets and feels that they have missed too much, but when they actually experience it, there is not much they can catch . What we see is always a small number of people reveling, and the bull market just raises the base number.
When the market is good, there is really no reason to talk about it. A track is pulling in, and as long as it is a relevant concept or a concept that can be caught, it will take off. In such a market, it is inevitable to become impetuous. If you make less money, you will be impetuous, you will be impetuous in short positions, and if you lose money, you will be impetuous. Once you are impetuous, you will easily lose more money. When the market enters a deep bear market, people usually do not take too much risk, but often lose a lot of money in the so-called bull market. You know, Luna and FTX collapsed at the tail end.
02How to prevent the bull market from "breaking its legs"
With the development of the blockchain industry, it can be said that there are more and more concepts and tracks in this industry, and the threshold is getting higher and higher. For the vast majority of retail investors, it is actually becoming more and more unfriendly.
Here are a few points you need to pay attention to to prevent your legs from being broken:
1) New narrative
Every major market situation will give birth to many new narratives. The concept of digital gold in 2013, the explosion of blockchain application concepts in 2017, and DeFi in 20 years were subsequently transmitted to the main ecological application tracks of Ethereum, such as DeFi, NFT, and Metaverse. Chain games, and then new public chains began to reproduce the Ethereum ecosystem, all of which are narratives surrounding Ethereum. So in what directions might the next potential main lines be? At present, the probability of observing the Bitcoin ecosystem is very high.
The encryption industry has always been "loving the new and hating the old". In the next market situation, new narratives will be more popular than old narratives. For new narratives, at present, innovation usually starts on the chain. The relatively new narratives coming out of this current round of market conditions include Bitcoin ecology, Layer 2, LSD, account abstraction, robots, AI, and decentralized social networking. Please feel free to add more.
2) Consensus and open mind are important
For all concepts, the prerequisite for being able to break out of the circle is a consensus, so that people will be motivated to understand them. From Bitcoin to Ethereum, to the last round of NFT, chain games and so on. Although everyone says that technology is important, if there is no value capture, maybe the dog will ignore it; after there is a price, there are many people who will assign value to it . Therefore, the most important thing is to understand the new narrative first, no matter how many people criticize it or oppose it. In this industry, it is important to maintain an open attitude.
3) Faucet
How to judge which is the leader of a track? The simplest and crudest way is to look at the market value. Whichever one has the highest market value will be the leader. Generally, faucets are of pioneering significance and have a high premium, and it is easy for the strong to remain strong. Innovative projects are inherently risky and very energy-consuming. But there are also some tracks that do not have leading players, such as SAND and MANA in the metaverse concept, and leading players will also change, such as the development from CryptoPunk to BAYC in NFT.
4) Trends of top institutions
Although top institutions are suspected of "manipulating the market", and projects that pass through their hands can easily turn out to be behemoths , resulting in unprofitable retail investors, the impact of top institutions on the industry is all-round. Pay attention to their trends and their understanding of new projects. An attitude towards things is still necessary. After all, they are at the top of the food chain and have relatively more accurate control over the industry. Here are a few simple ones: head platform, A16Z, Paradigm, etc.
03What pitfalls should you avoid?
Although the market will improve and profits will become easier, human nature is there. Those who have lost money want to get back their capital, and those who have made money want to make more. Especially when watching others make money, it is easy to have FOMO emotions and then take the wrong direction. Accidentally completely cooled down. Here are 4 pitfalls that are easy to step into:
1) Leveraged contracts
Many newcomers have heard that they should not touch contract leverage, but if they can't stand the general environment, the platform will keep pushing it for you. Playing is not the worst part. If you lose money every time you play, your problem will be cured immediately. I'm afraid that you can actually make a profit at the beginning. It's like playing a game. It gives you a little sweetness and you feel like you can do it, and then you get completely trapped. Others are making money in the bull market, but you are chasing the bull market to recover. Can you make money by playing contracts? Of course you can, but very few people can keep this bowl of rice all the time. There are too few people who truly rely on contract freedom.
2) Easy All In
Don't think about making enough money in one go. It's too difficult. In this industry, the most important thing is that you still have the principal and are still on the poker table. Don't wait until the opportunity really comes. See the opportunity in front of you, but you can't take it. A chip. In addition, learn to respect the market. 312 and 519 are really miserable. How many practitioners feel that the industry is over after experiencing 312.
3) Frequent transactions
When the entire market heats up, individuals can easily be swayed by the overall market sentiment and become impetuous when making less money, becoming more impetuous when taking short positions, and even more impetuous when losing money. Why is it that I am the only one who buys things that don’t go up, and then frequently chase high prices and change positions? In fact, in the end you will I found it was better to just hold it still.
You must remember that when the bull market comes, as long as the project team does not run away, it will usually recover. When emotions arise, the quality of the project is not that important anymore. You must be patient, patient, and patient.
4) Follow the trend
Many people like to follow the trend and buy. The biggest problem is not knowing what they are buying. If you don’t know the mechanism and specific rules of the project, it is easy to get buried. Like Luna before, when the stablecoin begins to de-anchor, if you truly understand its mechanism, you will not continue to add positions after the de-anchoring.
The above are some mistakes that are easy to make in the bull market. You are welcome to add or share the pitfalls you have stepped on.
04 Summary
As for issues such as position allocation and when to exit, because everyone’s personal situation and background are different, we will not go into details here. Finding a way that suits you is the most important thing. In addition, don’t believe in those statements that create FOMO emotions, such as the so-called “If you miss this wave of market, you will never have another chance”, etc. Keep thinking independently. This industry is still the same industry as before, and some underlying things have never changed .
