The trading journey from 50,000 to 2.39 million: My exploration of the encryption market.

After years of exploration in the digital currency market, I have summarized 8 core principles of short-term trading, which involve the association mechanisms of mainstream encryption currencies and the operational methods at key points in time.

Part One: Market Structure Analysis

Bitcoin plays a leading role in the entire encryption currency ecosystem. In most cases, the rise and fall of alternative coins follow in step with Bitcoin, but Ethereum may sometimes break out into independent trends due to factors such as technological updates or institutional investments. It is worth noting that when the exchange rate of Ethereum against Bitcoin breaks through a long-term downward trend line, it may signal the approaching season for alternative coins.

There is a certain inverse relationship between Tether ( USDT ) and Bitcoin. When the premium of USDT rises, it often indicates an increase in market panic, and one should be cautious of a potential decline in Bitcoin; conversely, when Bitcoin rises, it is a good opportunity to exchange funds for USDT. Additionally, the growth of the total market capitalization of stablecoins is an important indicator of off-market funds preparing to enter, which may signal a change in future market trends.

Part Two: Time Node Strategy

The late night period ( 00:00-1:00 has low liquidity, making it an ideal time to set limit orders. It is recommended to place low buy orders and high sell orders before sleeping to profit from the price fluctuations during this time window.

The morning period ) 6:00-8:00 can serve as a barometer for judging the market trend of the day. If the market continues to decline from midnight to morning, and the morning session is still in decline, it is suitable to replenish positions, as there is a high probability of a rebound occurring that day; if the morning session continues to rise, partial profit-taking can be considered to guard against possible pullbacks that day.

The period at 17:00 on ( is when American traders start to become active, often leading to significant price fluctuations. This time point is particularly worth paying attention to, as it may bring important market turning points.

Although the trading day on Friday may not be entirely accurate, it is worth paying attention to the macro events that may occur on this day, such as central bank speeches or ETF fund flows, as these factors often have a significant impact on the market.

Part Three: Trading Psychology and Money Management

When investments are trapped, for highly liquid cryptocurrencies, a strategy of gradually increasing positions can be adopted to lower the average cost, with the typical recovery period ranging from 3 to 30 days. However, for low market cap cryptocurrencies that lack a practical application ecosystem, they face the risk of going to zero, so a strict stop-loss strategy must be implemented.

It has been proven that holding high-quality assets for the long term often outperforms frequent trading. Overtrading not only increases transaction costs but also risks losing funds in short-term fluctuations. Maintaining patience and focusing on the long-term development trend of the market is key to achieving stable returns.