Lighten up in small-cap cryptocurrencies

Long-term rating: Overweight

Short Cycle Rating:

Bitcoin accumulation

Lighten up in small-cap cryptocurrencies 

Today we tell investors how to dig out the in-depth information behind market trading volume. The essence of the market is trading, and trading is something that both buyers and sellers complete together. At a certain moment, some people in the market want to buy when they are optimistic about the future market, and some people want to sell when they are optimistic about the future market. When passing the other side, the price will move, and then leave a track on the K-line chart.

Measuring the size of the market divergence is not based on the mouth of the media, but the buying and selling of real money. Therefore, the market trading volume can reflect the divergence of the market. There are a large number of trading price ranges in the market, which is the main battlefield of the long-short game. The battlefield can help us find support and resistance levels, and then better observe the market and formulate buying and selling strategies.

The trading volume distribution chart is an indicator to find a dense trading range. From the figure, we can see that there are a large number of transactions at $49,717, and the price of Bitcoin will not go down when it falls here, because everyone in the market I feel that bitcoins below $50,000 are cheap, so some people or institutions buy them in large quantities. When the market digests the selling orders, the price is lured to a new low and a strong rebound begins.

A certain indicator may have a false signal, but multiple indicators supported by trading volume all point to the same conclusion, which is highly likely to be credible.

At present, there are 3 resistance levels facing Bitcoin's rise, namely $56,000, $58,949, and $63,000. Taking the recent $56,000 as an analysis, this is the concentrated area of ​​chips in the past, which has formed a strong force for the price rise of Bitcoin. Resistance, we can also see from the small-level graph that Bitcoin has launched several charges against $56,000 in the past two days, but they were all blocked by resistance.

Combined with our premise that the monthly line is negative, we believe that Bitcoin will fluctuate and adjust below $56,000 for a period of time, and use time to resolve the sell-off, and wait until the resistance becomes smaller before starting a new round of rise to repair $58,000 -$60,000 shortfall.

Investors are requested to be patient and not lose their bargaining chips by short-term disorderly shocks. Unless they have a mature trading system that can profit in volatile markets, we do not recommend investors to participate in volatile markets.

The reason why many investors can't help but buy and sell in a volatile market, resulting in no change in price, no positions, or less coins, is because they want to find certainty in an uncertain market. As far as the industry is concerned, there may be the courage to create opportunities even if there is no opportunity, but this courage will become impulsive and reckless in the investment world. Following the trend is choosing not to move in the disorderly price fluctuations. When there is an obvious trend in the market, follow it.

Charlie Munger summed up the successful experience of Warren Buffett, the stock god, and said: "We have an important secret. When there is nothing to do, Buffett is very good at doing nothing." As the approaching time approaches, we also wish you all a happy 51 Labor Day in advance, and spend a happy 51 holiday with your family and friends.