🧐 A Necessary Test on the Bull Market Road: How to Navigate Volatility and Steadily Hold Your Positions | Volatility is the Eternal Winner, Those Who Fear Heights are the Unfortunate Ones

Clearly, we have once again reached a critical moment of mutual stupidity between bulls and bears—

Technical Analysis: MA120 is trending down, large accounts are showing unusual activity, and the market temporarily lacks a catalyst; the chart indicates a downward trend.

Fundamentals: Macroeconomic and on-chain data are also changing, raising doubts about whether the chart influences the fundamentals or if the fundamentals are merely playing along with the chart.

Sentiment: Some believe that Q4 will definitely see a rebound, especially with the interest rate cuts in September and the upcoming macroeconomic easing, leading to a buy-the-dip mentality.

Investment Market: No one can hold the truth firmly; volatility is the eternal winner.

2️⃣ How to Respond—

The process at the peak of a bull market will see at least three instances of long-term sideways movement or even sudden drops, making people think a crash is imminent and causing them to relinquish their positions.

At this time, it is crucial to determine whether one can make money; the key focus should be not only on market sentiment but also on overall market trading volume:

In a normal bull market progression, the pattern should be "increased volume with rising prices," meaning that the trading volume during the next wave of increases should be greater than that of the previous wave before the adjustment.

If any wave of increase shows a clear divergence, meaning that the trading volume of the new wave does not reach a new high or is even lower than that of the previous wave, while the price keeps hitting new highs, this is a highly dangerous signal indicating a potential trend reversal.

It is important to know that if a trend reversal occurs under such circumstances, the impact can be devastating.

3️⃣ What is the Current Situation?

Currently, whether it is market sentiment, the issuance of stablecoins, or trading volume, all are experiencing unexpected growth. Therefore, liquidating positions at this time would be unreasonable. If you are concerned, you can make a small reduction based on your psychological judgment and market assessment, and then buy back at a certain psychological price level, but you must strictly adhere to your strategy.

For example, using the 30-day moving average as a reference, if it breaks the 30-day moving average, then sell a portion of your positions! Why choose the 30-day moving average? Because if you choose a shorter-term moving average, daily fluctuations may break it, leading to misjudgment of adjustments and missing out on larger trends.

However, if you use a long-term moving average, the slope of the rise during this phase is already quite steep, and the corresponding angles of the medium to long-term moving averages are also quite large. Using a long-term moving average could result in a terrifying profit drawdown, which is clearly not what we want.

Stick to your principles based on your investment style and position management; that is the best response strategy!

Final Words—

I currently feel relatively secure with my position allocation, having made some sales at a relatively high level earlier, so I choose to stay put! However, if I were fully invested, I might take some action.

I hope everyone can:

Stick to their principles and rational analysis; do not fear heights, do not fear heights, do not fear heights! Those who fear heights are the unfortunate ones!

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