Source: Talking about Li and other things
If we take January 2023 as the starting point of this bull market, then up to now, this bull market has lasted for almost 890 days. And if we take October 2023 as the starting point of this bull market (that is, starting from the Bitcoin price breaking through the high point in 2022), then this bull market has lasted for almost 595 days. As shown in the figure below.
In addition, from the overall trend point of view, the trend of Bitcoin in this round is somewhat similar to that in 2021. If you like to follow the trend, then there are two possible trends:
One is similar to the trend around September 2021, that is, Bitcoin will enter a new correction, such as a correction to around US$95,000, and then rise again. It is not impossible to rise to more than US$150,000. After some altcoins complete a short crazy performance, the market will enter a new round of bear market cycle.
One is a trend similar to that around November 2021, that is, Bitcoin will break through its historical high again, and then after some altcoins complete a short crazy performance, the market will enter a new round of bear market cycle.
However, I found that some people on the Internet believe that Bitcoin will reach $200,000 by the end of this year, which we think is a very optimistic prediction. In other words, if Bitcoin can really reach $200,000 by the end of this year (for example, it will reach $211,000 around the end of September), then in the subsequent bear market cycle, the bottom of Bitcoin may be $50,000-60,000 (for example, around the fourth quarter of 2026), and in the next bull market, the price of Bitcoin may reach $350,000-400,000 (for example, by the fourth quarter of 2028 or the second quarter of 2029).
Of course, the above are just random guesses. It is difficult to accurately predict the market because no one knows whether there will be any new black swan events next. But no matter which way Bitcoin will go next, and no matter whether Bitcoin will reach the $200,000 that some people think it will reach this round, if you still believe that history can continue to rhyme, then this round of bull market cycle seems to leave you little time, maybe only a few months in terms of time dimension.
In fact, what we want to express here is that each bull market cycle does not show a continuous parabolic rise, and the process always includes a relatively healthy decline (correction). If you still haven't made money in the past 600 days of the bull market cycle, or you have made money but lost it, then you should think carefully and optimize your next trading strategy.
Simply put, the market cannot continue to be bullish, and it is impossible for most people to really make money in a bull market. This is the cruel reality we must accept. Don't try to predict the so-called precise top in a bull market. The most important thing during a bull market is to grasp the right time to take profits in batches, rather than always thinking about selling perfectly at the top.
Moreover, if you are firmly optimistic about the long-term narrative of a target (such as Bitcoin), then as long as you expand your investment cycle and don't mess around, the probability of losing money seems to be relatively low. However, as a person who has experienced it, this is easier said than done, because I have seen too many people enter this field with the fantasy of using it as their own ATM, hoping to quickly achieve a small investment and a big return.
If we focus on long-term investment, we can still use some methodologies to gradually optimize and improve our trading strategies, such as:
1. Master the necessary basic knowledge
I remember that in many comments before, people would ask questions like: What do you think of the XXX coin I bought? Can I hold the XXX coin for a long time? What is the highest price the XXX coin can rise to? And so on.
Then sometimes I would ask them, can you list 3 simple reasons for buying this XXX coin? As a result, most people can’t tell me why they bought this coin. Basically, they bought it after listening to a teacher’s recommendation, seeing others say it has potential, or because they thought the project’s promotional copy was awesome, so they bought it…
The endings of most of these people are predictable. Either they lose their principal in the end, or their positions are simply defrauded and reduced to zero. Very few of them can actually make money by relying on the so-called teacher's recommendation or their own luck.
Some people heard that trading is risky, so they planned to do airdrops or play on-chain financial management. Therefore, some people who wanted to do airdrops searched for various airdrop tutorials on Twitter or Google every day. As a result, they played with the interaction of N new projects and consumed N times of GAS without getting any actual results. In the end, they only bought a bunch of useless NFT pictures or clicked on the invitation links of N bloggers to improve the points ranking for others. Some people who wanted to play on-chain financial management added to various pools, and finally found that they not only did not get the high APY in the publicity, but they became liquidity providers. You are attracted by other people's high yields, but they are attracted by your principal. Some people were even phished, resulting in the assets in their wallets being looted.
In fact, in this field, if we only do investment, we don’t need to learn any advanced technology, but we should still master the necessary basic knowledge first. For example, if you like to play with financial management, then at least the basic knowledge you should master includes:
- The concepts of DEX and CEX, and the differences between their financial product models
- What is single-currency financial management and dual-currency financial management (impermanent loss)
- What is Lending, and some corresponding platforms and gameplay (Aave, etc.)
- What is Liquidity Mining, and some corresponding platforms and gameplay (Uniswap, etc.)
- What is staking, and some corresponding platforms and gameplay (Lido, etc.)
- There are also various types of yield aggregators, stablecoin strategies, structured products, restaking, etc.
- In addition, what on-chain tools or on-chain data can be used as auxiliary reference for financial management? Of course, the most important issue is protocol security assessment, etc.
To sum up, you need to first sort out and learn some basic concepts related to financial management, and then choose the products and methods that best suit you based on your preferences or risk appetite, and continue to stay focused and research.
2. Optimize the profit strategy of positions
In fact, we have already sorted out a lot of topics about position management and trading strategies in the previous series of articles in Hualihuawai. To sum it up, the core is actually one sentence: stay focused.
In previous articles, although we have also shared that some people can achieve hundreds of thousands or even millions of dollars in revenue by continuously trading hundreds or even thousands of MemeCoins in small amounts (such as using trading robots), this method is obviously not suitable for most retail investors.
For ordinary retail investors like us, focus often beats quantity. Don’t think about buying everything (you don’t have that much money to allocate), and don’t chase after whatever is popular. The best way is to focus on 1-2 areas that you are most optimistic about.
If we look directly at the sub-sector classification in Coingecko, there are currently more than 500 detailed sectors in the crypto market, such as DeFi, RWA, AI, GameFi, DePIN, etc. The platform alone has included and listed more than 17,000 projects (tokens). One person’s time and energy are basically not enough to study all the projects in all fields. Therefore, we only need to select 1-2 tracks that we are most optimistic about and conduct in-depth research and track the project opportunities therein. At the same time, we should try to control the number of projects (tokens) purchased and held to less than 5.
On this basis, you can plan your positions based on your own risk preferences. For example, what percentage of your positions are allocated to Bitcoin, what percentage of your positions are allocated to altcoins, and the percentage of your positions shown is allocated to MemeCoin...
Then, how much of each ratio is for long-term investment and how much is for medium/short-term investment? What is the profit target? Should a clear stop-profit/stop-loss be set for medium/short-term investment?
In short, when we can stay focused on specific matters, strictly implement our own trading discipline in the system (trading strategies and trading indicators that suit your own), and grasp the laws or rhythm of the cycle, we will not be easily eliminated by the market.
3. Develop specific abilities and specialties
Everyone is an independent individual, and everyone has his or her own abilities or specialties. When you have mastered the necessary basic knowledge and are able to optimize the profit strategy of your positions, the next thing you need to do is to continue to upgrade yourself.
This may need to be considered in combination with your own preferences, such as:
If you like writing, you might as well open a self-media channel like Hualihuawai, so that you can regularly output your thoughts, because output is a better way to learn than input (i.e. output-based learning). Of course, if you are still shy and unwilling to make your ideas public, you can also try to create your own personal knowledge base through some note-taking platforms or share them in a small circle through specific circles.
If you like to talk, you might as well record some of your learning results or thinking summaries through some video platforms, or interact with others through live broadcasts to gain exchanges of ideas through continuous "face-to-face" communication.
If you like data, you can try to collect various on-chain tools that you think are useful and make them into a toolbox (such as airdrops, arbitrage, financial management, copy trading, whale watching, etc.), so as to conduct more targeted and in-depth research on the market, projects and other aspects that interest you, and look for Alpha opportunities that others may not see for the time being.
If you like technology, you can consider learning some basic codes or programming knowledge, or if you like K-line, you can find some professional materials or books to conduct necessary research... and so on.
In short, in any field, if we want to avoid being eliminated by the market and continue to gain benefits or results, we need to keep upgrading ourselves and stay ahead of others. Although sometimes, a person's luck may temporarily put him in a leading position, the final competition is still about a person's professional level. Instead of standing by the abyss and envying others, it is better to retreat and build a net.
4. Cross-field expansion
This may be an aspect that many people tend to overlook at present. For example, some people may like the encryption field very much, but at the same time they may reject or look down on other fields such as the stock market and foreign exchange market.
In the past, perhaps this idea was feasible, but it seems that it will not work now (including in the future), because the current crypto market is no longer a niche retail market. It has begun to become a money (financial) game in which more and more institutions (and even some countries) participate.
We need to pay attention not only to the changes in the crypto market itself, but also to the stock market (especially the US stock market), macroeconomics, and even international political forms. In other words, we can focus only on Bitcoin in specific transaction execution, but it is not enough to just understand Bitcoin (even if you have read the Bitcoin white paper and studied the Bitcoin code thoroughly). In order to better achieve or reach your trading goals, you may also need to pay attention to the trend of gold, the trend of US stocks, etc. If you are proficient in one thing but cannot achieve an effective profit target, it is actually a waste of time.
In addition to related fields, depending on our personal time and energy, we can even consider expanding or exploring some external knowledge in other fields.
Of course, in addition to what we mentioned above, there is actually one most important thing, which is: keep your body healthy. This field is traded 24/7, but our bodies need rest and moderate exercise. Don't sacrifice your health directly in pursuit of so-called potential profits.
That’s all for today. The sources of the images/data cited in the text have been added to Notion. The above content is only personal opinion and analysis, and is only for learning records and communication purposes, and does not constitute any investment advice.
