Market Analysis and Investment Strategy of Bitcoin, Mainstream Currencies, and Altcoins
Today's sharing content mainly includes three parts:
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Today's sharing content mainly includes three parts:
1. Bitcoin current trend analysis
2. Market Analysis of Mainstream Currencies
3. Altcoin investment strategy
3.1. Currency price life cycle theory
3.2. MA moving average system
3.3. Precautions
01 Bitcoin current trend analysis
In the current digital currency market, Bitcoin is the only one, accounting for more than 68% of the market value, which is the vane of the market. Especially since the beginning of this year, under the background of institutional investors entering the market, the unilateral rise of Bitcoin has become more prominent.
We take November 2018 as the starting point, and the daily K-line trend of Bitcoin can be divided into three stages:
A: The bottoming stage of the bear market: Beginning on November 13 last year, Bitcoin fell rapidly and bottomed out, from $6,400 to $3,100, and then settled in the range of $3,000-4,000.
B: Rebound stage: Starting from April 2, the market will rise in heavy volume, and then start a rebound trend until it hits a high of 14,000 US dollars.
C: High volatility finishing stage: BTC surged up and fell back at 14,000 US dollars, and then consolidated in the range of 9,000-13,000 US dollars.
We are currently in stage C, the stage of high shock consolidation. In this stage, $9,000 is the bottom, and $10,000 and $12,000 are the two key points.
If the broader market falls below $9,000, it means the end of the rebound that lasted for several months, and the market will enter a deep correction range.
10,000 US dollars is an important psychological threshold for investors. When the market is above the point, investor confidence increases, the bulls take the lead, and the rebound continues; below this point, the bears begin to gain the upper hand, and the market falls into a small range callback finishing.
I think 12,000 US dollars is the dividing point between bulls and bears. If the market can stand firm at 12,000 US dollars and break through the historical high of 20,000 US dollars in 2017, it will be very promising.
In the short term, Bitcoin is in the range of 10,000 to 12,000 US dollars, mainly due to the trend of range consolidation, and compared to a few months ago, the volume has shrunk a lot. It is difficult to have a big market. The short-term operation focus is on Buy low and sell high, buy near the bottom range, and sell near the pressure point, which is a tasteless market.
The market has its own rules of operation, and the short-term market is unpredictable. What we need to grasp is the mid-to-long-term trend that follows the trend. For medium and long-term trends, I generally use the MA60 daily moving average indicator, as shown in the daily trend chart of BTC as shown below.
When the K line falls below the MA60 daily moving average in heavy volume, stop the loss in time, and then observe the suppression of the moving average. If it has been running below the MA60 moving average, the moving average has formed a strong pressure, and at this time suspend opening a position. Only consider buying when the K line runs above the MA60 moving average again. The best buying point is to buy after confirming the support of the MA60 moving average several times in a row.
Then the market continued to rise, and the MA60 moving average formed a strong support. Only when the K line fell below the MA60 moving average again, take profit in time. When the K line fluctuates slightly around the MA60 moving average (this is the current situation), you need to wait patiently, which represents a state of evenly matched strength between the long and short sides. You must wait until the direction is clear before entering the market.
02 Market Analysis of Mainstream Currencies
Since the beginning of this year, except for the halving of LTC and the rebound after the oversold in November-December last year, the overall performance of mainstream currencies is not good, and most of the time, it is seriously lagging behind BTC, showing that BTC is unilateral. Rise, stagflation of mainstream currencies, follow the trend of falling but not rising.
The analysis of the mainstream currency market is mainly based on two points:
A: Look at the trend of Bitcoin in the general direction: Generally, Bitcoin is the first to start the rebound trend. When BTC rebounds and rises again after a correction, the mainstream coins will start to follow up. The chronological order of the rise needs to grasp the rhythm and the timing of the ambush.
B: MA60 moving average analysis method: analyze with the daily K-line chart of ETH.
When the market was on the way down, it was suppressed by the MA60 daily moving average. Although there was a breakthrough in the middle, it fell below the support again shortly afterwards. Only when the market stabilizes and the K-line of ETH breaks through the MA60 daily moving average is the time to buy. The several buying points in the figure are all buying points that confirm the support of the MA60 moving average. After a round of upward trend, when the K-line falls below the MA60 moving average again, it is necessary to consider selling.
03 Altcoin investment strategy
On the whole, except for the good market of BTC this year, altcoins generally follow the decline but not rise. Market funds are concentrated on BTC and mainstream currencies. Faced with a lot of selling pressure, everyone is changing cars and fleeing the top, so it is difficult to have a big opportunity.
Specifically, the opportunities for altcoins this year are manifested in model coins, lock-up coins and popular new coins. For this part of the currency, I mainly use the following two methods to analyze and grasp possible opportunities.
3.1 Currency Price Life Cycle Theory
Aside from the impact of news, market sentiment, etc., we focus on the K-line, because the K-line is the most direct result of many factors. No matter what conspiracy the dealer has, it will always be reflected in the market. superior.
First of all, let’s set a premise. Regardless of the K-line trend of an altcoin, we can divide its entire life cycle into 6 stages and a key point:
A: The currency price is in a period of long-term decline and continuous bottoming;
B: The currency price is in a partial rebound stage in a downward trend;
C: The currency price is in a low area after a long-term decline and has undergone a full consolidation stage;
D: The currency price is in the middle of rising;
E: The accelerated rise of the currency price after a long-term rise;
F: The stagflation and high level consolidation stage after the currency price has risen sharply;
G: The price of the currency is running near an important technical pressure position (half-year line, annual line, or previous historical highs, points that have repeatedly failed to break through, or historical lows, points that have repeatedly confirmed support, etc.)
The above six stages can be regarded as the life cycle that any currency K-line must go through, from rising to falling, and from falling to rising, completing a cycle. For us, as long as we analyze which stage the currency is in, we can prescribe the right medicine. Let’s take the UUU token above as an example to illustrate.
The K-line trend of UUU tokens from April last year to the present can be roughly divided into 6 stages:
Stage 1: The running-in period after the new currency is launched is the first stage in which the banker releases chips intensively. This stage is the initial funding stage, which depends on the popularity of project promotion and the number of users. The short-term currency price fluctuates greatly, which may correspond to various stages of the currency price life cycle.
Stage 2: Corresponding to stage A of the currency price life cycle, the currency price continues to fall and finds its bottom.
Stage 3: Corresponding to stage B of the currency price life cycle, a partial rebound after a long-term decline, but the rebound is weak and it is difficult to change the downward trend.
Stage 4: Corresponding to stage C of the currency price life cycle, the bottom interval is sorted out, and the bottom is confirmed. This stage is the most difficult stage, and the market is not very good.
Stage 5: Corresponding to the three stages of DF in the currency price life cycle. After the bottom is confirmed, the dealer has received a sufficient amount of chips after the long-term downward trend in the early stage, and starts to pull up, attracting retail investors to take orders on the way.
Stage 6: Corresponding to the A stage of the currency price life cycle, it is only a large-scale decline. The problem reflected is obvious. After pushing up the currency price, the market maker did not arrange sideways for a period of time, but harvested quickly.
Key point: Near the highest point of the currency price corresponding to stage 6 in the figure, the dealer does not choose to continue to break through, but to harvest.
Generally speaking, among the six stages of the currency price life cycle, the best time to build a position is in stage C and stage D, and the best time to ship is at the end of stage E and stage F. What needs to be paid attention to in short-term operations is the key point G, which is the pressure and support point of the currency price, and it is also an excellent point of shipment and accumulation.
Combined with the life cycle of currency prices, we can divide the trend of many altcoins into two categories:
A: Short-term rebound trend: It can be regarded as stage B, a partial rebound after a long period of decline, but when the general environment is not bullish, it is difficult to escape the fate of falling again. In this case, escape to the top in time and don't be too greedy.
B: The bottom-finding stage of continuous decline: that is, the downward trend in the A+B stage. The IEO currencies of various platforms are the most typical. These IEO currencies must wait until the characteristics of the C+D stage to stop falling. You can only enter the market, otherwise you will only be covered, so don't enter the market lightly.
3.2 MA moving average system
The moving average indicator, also known as the MA average indicator, refers to connecting the average closing price of digital currency within a period of time into a curve and displaying it in the K-line chart, which is used to display the historical price fluctuations and reflect the future development trend of the price index method of technical analysis.
Because the moving average is the average value of the price over a period of time, it acts as a support line and a resistance line in the price movement. The MA is broken, actually the support line and the resistance line are broken. We can use this to judge when to buy and sell altcoins.
In the use of MA moving average, it mainly considers the changes of long and short periods:
A: Medium and long-term: focus on the daily MA moving average, confirm the reversal signal after the long-term trend of the currency price, and confirm when to enter the market.
B: Short-term and medium-term: mainly refer to the 1-hour/4-hour MA60 moving average to confirm the short-term buying point.
The combination of the MA moving average indicator and the above currency price life cycle theory is the key to playing with altcoins in the short term. In summary, the main points of analysis lie in three points:
Which stage of the currency price is in the life cycle;
K-line trend and MA60 daily moving average position;
The K-line trend and the position of the 4-hour level and the hourly level MA60 moving average.
Let’s take BEAM as an example to analyze. As shown in the figure below, at the daily line level, the entire currency price cycle can be roughly divided into 3 stages. The currency price was in a downward cycle at the beginning. Although there was a small rebound in the middle, the market continued to fall after the rebound , this time is not the best buying point. The currency price has shrunk and fallen to a certain extent. After the bottom is sideways, it will increase in volume again and successfully break through the MA60 daily moving average. This is the time to buy, and then the currency price has risen all the way. After the accelerated rise, we ushered in the selling opportunity 1, and the selling opportunity 2 after the K-line fell below the MA60 moving average. Selling at these two points can obtain good returns.
The 4-hour level K-line is mainly used to confirm the specific buying point. As shown in the figure below, after the currency price breaks through the MA60 moving average, there are three waves of buying opportunities. Wave (buying opportunity 2), even if you miss it, there is a third wave, or even a fourth wave, as long as the K-line trend is above the MA60 moving average, and the retracement confirms the support of the MA60 moving average, it is a better buying point . But the premise is not to chase high.
The MA moving average analysis method, in simple terms, is to look at the daily MA60 moving average first. If the heavy volume breaks through, it means that the downward trend may be reversed, and you can consider entering the market at an opportunity. Then look at the 4-hour MA60 moving average. After a heavy-volume breakthrough, there will generally be a retracement. Look at the support strength of this moving average. Then sell when the currency price rises to a historical high, or falls below the daily line/4-hour level MA60, thus completing a round of buying low and selling high, and successfully escaped the top.
3.3 Precautions
1. Don't stud.
Stud is a big taboo in a bear market, because you can't determine the currency of your Stud, it must be a currency that has the potential to rise in value, rather than being tempted by all kinds of advocacy and temptation. In the face of an uncertain trading market, the safety of principal is absolutely the first priority. It is not wisdom but foolishness to put all your chips on the table from the very beginning.
2. Do not open positions on the left side.
When the currency price is in a downward trend, don’t rush to open a position, but wait for a better opportunity to enter the market after the currency price has fallen to the bottom and build a stable bottom, that is, to open a position on the right side. Generally speaking, the fluctuating trend of the currency price with a small range and a slow decline is an operational trap for investors. Once bought, the profit is very small, and it is easy to change from a quilt cover to a deep set. All kinds of IEO currencies are excellent case references. The picture below is the IEO currency BLOC of the OKEx exchange. It has been more than 4 months, and the more you buy, the more you are trapped. The investors who opened positions on the left are all buried.
3. Don't have any illusions about altcoins.
The so-called fantasy is used to be broken by reality. The time for disillusionment in other aspects may be relatively long, but in the financial market and in the currency circle, the time will be very short. It is a good thing to have faith, and it can make you happy, but if you are deceived and bewitched to have faith in a certain altcoin, it is better to get rid of it as soon as possible.
4. The strategy of altcoins must be short-term, at most short-term and medium-term, and you must not have long-term ideas.
To play altcoins, there is only one strategy: buy low and sell high in the short term. There is nothing wrong with the idea of using a small amount of positions to gain big profits, but it must be pocket money, and if you make money, you must run away, learn to escape the top, and don't foolishly die. The picture below is the daily K-line chart of the Beam anonymous currency. There are 3 relative bottoms. Buying in this range and then selling at a high point can make a profit with a high probability. But this is a test of personal K-line technical level and ability to analyze the disk, otherwise it is easy to miss the opportunity.
5. Altcoins should set stop-profit and stop-loss points, and strictly enforce trading discipline.
It is normal to set a stop loss range of 30% at the moment. Once the price of the currency falls by more than 30%, stop the loss immediately and get out. Don’t think about waiting for a rebound, and you will often be deeply trapped while waiting. In addition, you can also focus on 1-2 indicators, such as key point breakthrough (pressure level/support level, heavy volume breakthrough or breakout), another daily line level MA60 moving average, sell when it breaks, buy when it breaks, Strictly implement your own set of trading disciplines, it is very difficult to be caught, at most a small loss, a small loss is normal, follow up with funds to continue to play, seize the opportunity to win back. But if you are deeply trapped, you can only wait to die, a completely passive situation.
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Briefly talk about today's market.
At the daily line level, BTC is still in a fluctuating trend after the previous decline. It is running within the range of MA60 and MA90. At the beginning of the month, the broader market may usher in a real change.
At the hourly line level, the market has fluctuated upwards in the past few days, but the volume of the bulls is relatively weak. They were suppressed by the shorts yesterday afternoon, and the market showed a gate-shaped trend. The short-term market is still not optimistic. In order, the lower support is 9,800-10,000 US dollars, and the upper pressure is 10,500-11,000 US dollars. Without the cooperation of strong volume, it is expected that this volatile trend will continue, and short-term operators can buy low and sell high.
The trend of mainstream currencies keeps pace with the broader market, rising and falling at the same time. Compared with the market some time ago, the decline of mainstream currencies is relatively limited, indicating that the selling pressure on the market has decreased. In the following period, the market will stabilize and rise, and mainstream currencies will gain more room for supplementary growth.
Some altcoins have recently rebounded in large volumes, and the funds behind them are relatively active, reflecting a certain degree of willingness to go long, but don’t hold out too much hope, there is a high probability that the dealers will push up the market. Therefore, don't chase the rise and kill the fall. If you want to enter the market, you can pay attention to the price retracement of the altcoin after the violent rise. According to the above method, the first step is to determine which stage of the currency price life cycle the currency is currently in, and then use it for 4 hours / 24-hour MA60 moving average to judge short-term support and pressure positions, and operate flexibly.
In addition, if you have any currency you want to analyze, or questions about digital currency investment, you can ask questions in the message area below, and your message will be answered.
