How to follow the trend in the cryptocurrency investment market?
Yesterday I shared with you my views on silver and A-shares. Some common laws in these two markets also apply to the digital currency market.
As far as the current volume is concerned, the overall digital currency market is still very small; in terms of the investment attributes of digital currency, the positioning of real big funds (such as traditional financial institutions) is still in the stage of exploration, and only a few dare to invest in it. Institutions that eat crabs have entered the market first. These two characteristics doom this market to be more influenced by the outside world and have higher risks than the silver and A-share markets I shared yesterday. This is what ordinary investors should always be vigilant about.
The current environment of the whole world is the flood of global currency. Under this premise, all investment markets will be flooded. As long as this premise remains unchanged, all investment markets will continue to bubble.
Therefore, there is no shortage of external funds in the digital currency investment market. Besides, are there other important factors in the digital currency market that will affect its future trend? Yes, that is the engine of this round of bull market---institutional investors.
If one day institutional investors start to change their attitudes and believe that Bitcoin is no longer attractive, they will sell en masse and suppress the market. I think this is probably the biggest risk in this round of bull market, and we should pay close attention to it.
Judging from the current situation of institutions entering the market, whether it is Grayscale or MicroStrategy, their current investment is still very small compared to traditional institutional investors. Therefore, a large number of institutional investors are still on the sidelines. Even if some have entered the market, they are still just testing the waters with small funds and have not made any big moves.
On the other hand, under the current market conditions, if institutional investors who already hold coins want to sell, judging from their average purchase price of bitcoin (about 20,000 US dollars), most of the profits will not even double. However, they are unlikely to appear at this point.
Therefore, based on this judgment, I believe that the current market risks are still controllable, and the general trend is still upward. We ordinary investors should not act rashly, just sit on the windmill and move forward.
That's how we ride the tide at this stage.
That's why I keep emphasizing,Don’t sell the high-quality chips in your hands at this stage, whether it is Bitcoin, Ethereum or the leading DeFi project I am optimistic about, now is not the time to sell to make a profit.Selling at this time is equivalent to getting off the car in the early or mid-term of the bull market, and it is often difficult to retrieve the chips sold at this time in the future, because even if it pulls back, the price of the callback may be higher than the selling price. This causes investors to completely miss the bigger market behind.
In the past few days, some readers have left messages asking why there is a risk of $1,500 on Ethereum? In fact, what I mean is not that there will be risks for Ethereum above $1,500, but that when Ethereum stands firm at $1,500, there will be no resistance to continue to rise. In this case, risks can easily accumulate. At this time, any surge in Bitcoin and Ethereum may lead to an early end to the bull market. Only a slow rise accompanied by multiple deep corrections can make a bull market healthy and long-term.
This is the key issue that runs through this round of the market, and it is also the focus of our attention from time to time.
For investors who have already thrown away the chips in their hands, I suggest that you calm yourself down first, and don't rush to recover the sold chips. A bystander's mentality observes the next development of the market, and tries to analyze and judge the next trend of the market according to his own understanding, turning this market into an opportunity to exercise mentality, learn knowledge, and accumulate experience.
The investment market will never lack opportunities, but what is lacking is a correct mentality and rational thinking.If the current round of the market does not make money, but develops a calm mind and advanced thinking, this will be a more valuable asset than profit.
