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Recently, the market has shown a pattern of narrow-range consolidation during the day and rapid declines at night. During the day, trading is light, with a significant drop in volume. Only occasional technical rebounds occur, but they fail to form effective breakthroughs. At night, the market experiences sudden irrational selling, with prices quickly breaking through key support levels, resulting in a cliff-like drop. Overall, the market is in a trendless, oscillating state, with both bulls and bears locked in a stalemate, and the bulls are under continuous pressure from the bears.
Bitcoin (BTC) is currently in a rebound phase, but it has not yet fully reversed. The sharp drop a few days ago, although it bottomed out and rebounded, subsequently fell again, forming a minor downward channel. From a technical perspective, the current low is around $96,000, which is also the lower support level of the downward channel. If we use the Fibonacci retracement line to judge, this position is precisely the 0.618 support level, indicating that it may have stopped falling in the short term and is expected to see a rebound soon.
Large token unlocks have led to a sudden increase in market selling pressure, while liquidity constraints have limited the ability of funds to take over. These two factors interact to form a negative feedback loop, plunging the market into a "death spiral." Panic spreads among investors, and the market is filled with pessimism.
What can be focused on for bottom-fishing in a bad market?
In terms of grasping new market narratives and new tracks, Binance is the industry's weathervane, and its liquidity support is undeniable. The bear chain (BERA), which was launched on Binance yesterday (February 6), performed well. For more information on the bear chain, you can refer to Sunny's secondary article. More importantly, attention must be paid to information from the United States. The previous price increases of DOGE and PNUT speak for themselves. So it is essential to keep an eye on it.
Do Altcoins Still Have a Chance to Turn Around?
Let's talk about altcoins with strong whales! The anticipated altcoin season in the first quarter has so far resulted in a lot of bloodied chips. However, no one dares to pick them up, fearing that they will buy at the wrong time. Trump's inauguration is a long-term positive for the market, but it will not manifest in the short term. What comes next is the interest rate cut. If there is no rate cut in March, it is highly likely that the market will continue to be stuck in a consolidation phase.
For investors who are enthusiastic about altcoin investments, closely monitor the market sentiment of Bitcoin and Ethereum to capture short-term opportunities in strong altcoins. But always remember, do not be greedy. Generally speaking, coins that have successfully listed on major well-known exchanges, such as Binance, OKX, Upbit, and Huobi, and have daily trading volumes of hundreds of millions or more, and hold a leading position in their respective tracks, have certain investment value. Even if they are temporarily trapped in the short term, there is no need to panic excessively. Coins like SUI, SOL, and PEPE fall into this category. Additionally, coins with ETF fund speculation, such as TAO and LTC, may offer potential returns, but they also come with relatively higher risks and require extra caution when investing. If you are seeking high returns, consider using a portion of your profits to gamble on the chain.
As for other altcoins, it is recommended that you prioritize the leaders in each track. Because even if you are temporarily trapped in the spot market, or forget to set a stop-loss, the leading coins, with their inherent advantages, still have a higher probability of returning to their original prices in the future.
Given the complex market situation, investors should observe more and act less. If you still insist on participating in altcoin investments, never harbor unrealistic long-term holding fantasies about any coin. Always be ready to seize opportunities. Once there is a profit, try to reduce your position cost, or even achieve a zero-cost position. Only in this way can you stand firm in the unpredictable market.
Today, the fragmented state of the crypto market is a necessary stage for the industry's transformation. Sunny believes that everyone needs to adjust their mindset and plan their positions reasonably.
Trading Strategies for the Current Market Conditions
After a round of violent shakeouts, the altcoin market is in disarray, with many retail investors suffering heavy losses. Some are even beginning to doubt whether the bull market will return. In reality, whether it is a bull or bear market, without a reasonable trading strategy and strict execution, the alternation of bull and bear markets has no direct correlation with investors' returns. The final outcome is most likely still a loss. For the current market conditions, there are two trading strategies that I personally believe are relatively effective:
Short-term Swing Trading: This strategy requires investors to have certain technical analysis skills and absolute execution ability. When operating, it is necessary to enter and exit quickly and strictly set take-profit and stop-loss points. Otherwise, a slight mistake can lead to a chronic loss situation akin to being slowly cut with a knife.
Dollar-Cost Averaging (DCA) Strategy: Choose one or two coins from BTC, ETH, and SOL for regular investment. By buying and selling in batches, achieving stable profits is not difficult.
