Cryptocurrency Survival Rules: Don't Mistake Selling for Consolidation, This is How Retail Investors Lose
Having been in the cryptocurrency space for eight years, the most unjust way I've seen to lose money is mistaking the main force's selling for consolidation and bottom fishing. Last week, a brother urgently reached out to me, "Kun Ge, this coin has dropped by 30%, should I average down to reduce my cost?" I opened the candlestick chart and my heart sank; this is not consolidation, it’s clearly the main force dumping their holdings. Yet he actively chose to dive into the trap.
Recently, there was a coin that was very typical, it soared from 2U to 5U and then started to correct. A group of retail investors shouted to buy the dip in the group, but the more they added, the deeper they got trapped, and by the time they cut losses to exit, they were out of tears. In fact, the selling signal was crystal clear; during the highs, the trading volume surged several times, yet the coin price stubbornly refused to rise — this was the main force stealthily exiting. Then came a cliff-like drop, crashing from 5U directly to 3U, without any rebound in between. After the drop, there was a wave of false bullishness, making it seem like it was about to take off, but in fact, the trading volume had already shrunk, just waiting for the last batch of bag holders.
What does real consolidation look like? For instance, the GAMA I was monitoring earlier, it had no volume when it dropped, but the trading volume surged immediately during the rebound, and the key support level was held firmly; this is the main force cleaning out weak hands.
Remember these three points; life or death depends on them. Consolidation is low volume during drops and high volume during rises, while selling is high volume during drops and low volume during rebounds. Consolidation holds key levels, while selling directly breaks below the baseline. Consolidation is slow drops and fast rises, while selling is fast crashes and weak rebounds.
The cryptocurrency market doesn't nurture fools; if you can't understand candlesticks, the tuition fees will only keep increasing. The pits I’ve stepped into back then are more than your principal now, and I finally see the light; it’s up to you whether you follow or not
