BIT居士

The challenges of long-term investing and dollar-cost averaging are staying the course and having sufficient cash flow.

Retail investors shouldn’t try to get rich overnight. They already have limited capital, so there’s no need to rush into going all in.

Have you ever thought about this: suppose you have $10,000 and your overall market outlook is right, but you lose your principal. Ethereum rises from $2,500 to $10,000. If you use 5x leverage, your $10,000 would grow to $200,000. But if Ethereum falls from $2,500 to $2,000, your $10,000 goes straight to zero. If you’re aiming for a 20x return, the risk is that Ethereum only needs to fall 20% for your entire position to be wiped out.

From a spot-trading perspective, I’d like to make another point: many people get trapped in a cycle of excessive trading. They try to catch every swing, trading back and forth, and end up churning through their principal. To recover their principal—or even double it—they then need to make an even bigger return.

Frequent trading in and out may look like you’re seizing opportunities, but in reality, it gradually eats away at your principal. By the time you realize your principal has been whittled away, getting back to breakeven is already difficult—and doubling your money is even harder.

That’s because losses and the returns needed to recover them are never symmetrical.

A 10% loss requires an 11.11% gain to break even;
a 20% loss requires a 25% gain to break even;
a 50% loss requires a 100% gain to break even;
an 80% loss requires a 400% gain to break even;
a 90% loss requires a 900% gain to break even.

In other words, the less principal you have left, the more extraordinary the return you need to recover it. The most dangerous thing about trading back and forth isn’t one big loss; it’s the repeated friction and steady erosion that eventually trap you in a position where you have to multiply your money many times over just to get back on your feet.

So what you should really be controlling isn’t whether your next trade will make money, but whether your principal can still withstand the losses. Avoid unnecessary trades and protect your principal—that’s what gives you the chance to recover your losses and grow your money.

So here’s what everyone should do: stay away from leveraged contracts, trade less frequently, and protect your principal. That’s the way to go.

Are you feeling more excited the further the price falls? Are you hoping it will drop a little more so you can buy the dip? Are you thinking, “I didn’t dare get in last time, but if it drops again, I’ll definitely get on board”? If the market is in this kind of mood, there are two possible scenarios:

1. The price may not fall much further. It might simply wick down to $80.3K and then sharply reverse, or make a second bottom to liquidate leveraged longs. Keep a close eye on areas below where leveraged long liquidity is concentrated. Most likely, the price will wick down to liquidate that cluster of longs, perhaps around $79K or $75K, and then sharply reverse. It would create the impression that the bull market is back, making everyone regret not getting in again, before rallying straight to $89K, $92K, $95K, $98K, $102K… and then suddenly plunging 20,000 points to around $78K.

2. The price falls in a steady staircase pattern. Everyone starts buying the dip, only to keep buying too early, before the bottom is in. It falls until people can’t take it anymore, and even those who bought the dip can’t resist selling. Then it rallies quickly, leaving everyone regretting once again that they didn’t get in.

One reason supports the first scenario: would the big players really dump the coins they worked so hard to accumulate during the bear market, only to let institutions, publicly listed companies, whales, and long-term holders who missed the boat buy them up? That would be costly. They have to do the math: either dump the price to get everyone to hand over even more coins so they can accumulate, or have enough leveraged longs to liquidate. A sell-off is not cost-free. The first dump costs much less; the second could cost many times more, assuming retail investors sell into it and nobody dares to buy. The situation now is that retail investors barely have any coins to begin with; most people didn’t get in in time. They already missed out on the last chance to buy at low prices. If the price is dumped again, there won’t be many coins in their hands to take from them.

The key thing to understand is that a sell-off is a way for big players to accumulate. If retail investors have no coins left, whose coins are they going to accumulate? Unless there are a lot of leveraged longs below that need to be liquidated. So every dip now is about clearing out leveraged longs, and there could be extreme wicks. Be careful.

What should ordinary people do? Be bearish, but don’t short. Get rid of leveraged longs and focus on spot. Buy a little on small dips and more on big dips. Use the high of this rebound as your reference point, then start calculating your buy levels: drops of 2,000–3,000 USDT, 5,000–6,000 USDT, 10,000 USDT, and 15,000 USDT would be suitable levels for buying spot.

The pullback is starting now. Remember: buy a little on small dips and buy more on bigger dips.

Don’t panic over another drop and become afraid to buy—or even panic-sell. Be bearish without shorting; add to your spot holdings during pullbacks. We’ll take the market as it comes, keep an eye on its direction, and adjust along the way. Market conditions can change at any time.

To do dollar-cost averaging well, it’s best not to follow the news, check the social feed, read all the KOL analysis, or look at candlestick charts.

Just focus on the funds you have available and stick to your strategy. Split your funds into two portions: one for investing at regular intervals and one for buying at certain price levels. Divide the portion allocated to price-based purchases into 15–20 smaller amounts.

Starting from a high of 86,000–87,000, use 86,500 as the average reference price. If it drops by 2,000–3,000 U, start buying one small portion, at around 84,500–83,500 U. If it drops by 5,000–7,000 U, double the purchase, at around 81,500–79,500 U. If it drops by about 10,000 U, double it again, at around 76,000 U. If it drops by another 15,000–20,000 U, double it again, at around 71,500–66,500 U.

If the price doesn’t fall to those levels, you can buy with one-third to one-half of the remaining funds after a sharp wick down, a V-shaped rebound, and a second test of the bottom.

Nowadays, anyone can be a KOL.

First of all, a high win rate does not equal high returns. If you trade 10 times and win 9, that is not as good as losing once. An 80% win rate can still mean losing money.

People are often misled by KOLs showing off things like “took profit again,” “80% win rate this month,” or “the VIP group has been profitable continuously,” while their candlestick analysis sounds very convincing. People get fooled by this and feel they are very skilled, which attracts you to follow their trades or join their paid VIP group.

KOLs are good at saying things that cover both directions. When BTC was at 84,000, they would say, “If it holds above 87,000, bullish; if it drops below 82,000, watch for a pullback.” If it goes up, they can say, “I already reminded everyone to stay bullish after holding above.” If it goes down, they can say, “I already warned about a drop after breaking below.” Afterwards, they package it as accurate prediction and present themselves as masters who never lose.

Often, people who actually make money do not have a high win rate, maybe only 30%. The cost of a very high win rate is frequent trading, and the profit targets they set are often extremely low. This high win rate is deliberately engineered. For example: take profit at 0.02%, but set stop loss much larger, like 2% or 10%. This will inevitably lead to small gains and large losses!

You only see the trades they want you to see. Give 8 signals in a day, 2 win and 6 lose, and they will only talk about the 2 winning trades. That is selective display: they keep the winning screenshots and never mention the losing ones, turning themselves into a never-losing master. In VIP groups, they post profitable screenshots. When the market rises, someone always buys the bottom; someone else gets wiped out with high leverage. Bloggers only post profitable screenshots, while liquidations and stop-losses are never published. Maybe their annual return is negative, and they are not even as good as you.

Candlesticks are lagging indicators. Trading based on candlestick charts is relatively basic; candlesticks are for retail traders to look at.

KOLs mainly rely on exchange rebates. The more they push you to trade frequently, the more suspicious their motives are. Real profitable traders trade very infrequently, maybe only once a month.

Some KOLs only show things like “90% win rate over the last 7 days” or “this one trade made 300%,” which has very limited reference value. You should look at long-term profitability, the trading system, and trading mindset. Being able to analyze does not mean being able to make stable money; a high short-term win rate does not mean high long-term returns; profits shown in screenshots do not equal profits for the whole account; and for people who talk about trading, their most stable income may not even come from trading itself.

What everyone should learn is: trading mindset, building your own trading system, anti-human nature thinking, and market-maker thinking.

If you still believe Bitcoin is in a bull market, and still believe in a Bitcoin halving bull run,

then the strategy from here is to buy the dips: starting now, every drop of 2,000, 5,000, 10,000, or 15,000 U is an excellent buying opportunity.

You can divide your funds into two large portions. Invest one portion in equal installments over five months, regardless of the price.

Divide the other portion into 10 parts. Buy the first part around 82,000; if the price drops by 5,000 U, buy 2 parts around 79,700; if it drops by around 10,000 U, buy 3 more parts around $75,000; and if it drops by around 15,000 U, buy 4 parts around 69,700. Whether or not the price reaches these levels, if there’s a long wick with high volume followed by a V-shaped reversal, you can choose to invest half of your remaining funds.

Don’t short. Stay away from leveraged contracts.

Now think about this: how many retail traders are already in the market?

Look at it from another angle: if Bitcoin fell back to $60,000 right now, would you buy? Would everyone else? Most people probably would. Some may disagree, thinking that even if it dropped to $60,000 or $50,000, they still wouldn’t dare buy. But we need to follow the logic: when big players push the price down, what are they trying to do? They’re buying as they drive the price down, aiming to scoop up the coins that panicked retail traders sell. They’re not trying to distribute their holdings—that happens when they push the price up. If they chose to push it down to $60,000 now, they wouldn’t shake out many coins, but they would cause a lot of retail traders to buy the dip. That would be counterproductive. That’s the logic. Does that mean it won’t fall to $60,000? Maybe it will. But if it breaks below $60,000, it won’t stop there. A huge black swan event could send it tumbling so far that you’d question everything. And if the price keeps rising from here, would retail traders dare to jump in? Most wouldn’t. The market tends to move against what most people expect. When the price keeps climbing and retail traders start shouting, “The bull run is here,” that’s when it’s reached a short-term peak.

All the drops we’re seeing now are liquidating long positions. Previous drops wiped out spot holders as well as long positions. So why has that changed? Before, retail traders were chasing the bull market near the top, and their coins needed to be shaken out. The situation has changed now: retail traders don’t have many coins left after being wiped out twice. They’re waiting for a drop so they can get back in.

So what should we do? Accumulate when the market falls: buy a little on small dips and more on big dips. If the price drops by more than 5,000, 10,000, or 15,000, increase your purchases accordingly. This refers to spot buying.

Let me talk about something realistic. I believe a lot of people are not on board right now. Many are hoping the price will drop so they can get in, and then the bull market will take off. If you analyze the logic behind it, you’ll know what to do.

Here are a few points to consider:

1. Bitcoin is at $86,000 now, having risen from $57,000. Many people have missed the whole move up, and now they’re thinking that if it drops back to $60,000, or even into the $70,000 range, they’ll buy in—or even go all in. Some are hoping to buy below $60,000, or even below $40,000. If it really does drop that far, will you dare to buy?

2. When we buy Bitcoin, we hope to be on board when it rises in the next bull market. But the reality is that in most bull markets, retail investors aren’t on board.

3. Suppose Bitcoin drops to the low $60,000s and everyone starts buying the dip. Who would be selling? The last time it fell to $60,000, people panicked and dumped their coins to those who bought the dip at that level. Would those buyers really dump the hard-won coins they got at $60,000 onto retail investors? Bitcoin has already tested the bottom twice. Trying to push it down again to shake out everyone’s coins would be very costly—possibly even unprofitable.

4. Trading goes against human nature. I’ve reminded everyone several times that Bitcoin’s bottom would either come early or be delayed, and it’s more likely to come early. The market probably won’t give everyone a chance to buy the dip. If it does, then that wasn’t the bottom. The bottom is very unlikely to come in October. That’s because, in everyone’s mind, the bull-bear cycle doesn’t change easily. The prevailing view now is that once you’ve sold your coins, it’ll be hard to buy them back cheaply.

5. If the defining feature of a bull market taking off is that most people aren’t on board, then right now is the best possible moment. If the price drops again, are institutions going to sell their coins to everyone?

6. In the past, Bitcoin was a game between retail investors, so it was easy to shake out their coins. But the market’s fundamentals have changed. Trying to shake out coins from ETFs, institutions, publicly listed companies, and sovereign wealth funds the way retail investors’ coins are shaken out? All I can say is: it’s hard. Very hard for the price to fall back to $58,000—unless there’s a major black swan event.

7. Could liquidity below the current price still be cleared out? Yes, it could. It’s just a matter of which side gets cleared first.

From here, you should buy when it drops, and at least make sure you have some spot Bitcoin on hand. Otherwise, what would Bitcoin reaching $1 million have to do with you? The logic behind buying coins should be to compare the future selling price with the current price—and decide on your selling price first.

A few days ago I felt bearish momentum was stronger. After observing over these past few days, Bitcoin has been refusing to pull back, like it’s “taking care of” the shorts. Spot is inserting upwards, but the futures aren’t—this is a bit strange. In theory, futures should spike up to clear out the shorts first, and then a pullback downward would begin. But that’s not what’s happening right now.

So my guess is: spot is sweeping the sell wall to open a channel for a rapid, sharp rally later.

Everyone has already rehearsed what to do if Bitcoin falls—so now, in your position, you would all be looking to buy. But will the market’s movement match everyone’s intentions?

So then, we need to rehearse what to do if it goes up. If at this moment Bitcoin breaks through 87,000 again, should we chase it? If it breaks through 92,000 and runs straight to 95, 102,000?

If Bitcoin refuses to pull back and makes another attempt up at 87,000, then it will very likely break—provided it holds above 85,000. Right now it’s at 85,100. If it breaks and holds, then it would target around 83,000–85,000 where shorts could get squeezed into liquidation. The liquidation points correspond to 100x, 50x, 20x, 10x, and 5x leverage. You can use these levels as references: 87.5, 89.7, 92, 99.7, 102 (thousand).

A situation like this is now facing us:

1) If it falls, it aligns with the sentiment that everyone in the spot market hasn’t boarded the train. There are an enormous number of retail investors—especially those old “green-hands” (old rookies who’ve been trapped)—who hope it will fall back, even as low as 40–50k, to go all-in.

2) If it doesn’t fall, then there are simply too many people chasing higher prices to open long positions on futures. If the longs aren’t cleared, then the counterparty side has to pay an extremely high price. There are many counterparties. Excluding institutions, ETFs, family offices, and listed companies—because those are already on the train—what’s left as the main role is: jiao易suo.

First you need to understand this: who is the counterparty when everyone trades futures? Sometimes you’ll notice that at a certain stage, everyone is trading in one direction—say, 80% of the funds are all moving in the same direction. For example, 10 billion worth is going long; 80% of everyone is heading in that direction. Then for the counterparty to match, someone has to fill that counterparty “hole.” There are two roles that can do it: jiao易suo and market makers (normally these two coexist peacefully while harvesting retail players together. But if the numbers aren’t enough, jiao易suo will also take action against the market makers—on 10.11, that’s what happened: most market makers essentially blew up in a chain reaction).

Once the counterparty shows up, people then understand why, even in a bull market, you can suddenly get a 20% crash. Because jiao易suo doesn’t clear these longs—it has to pay to the point of ruin. When everyone goes long, jiao易suo goes short as the counterparty. jiao易suo has unlimited U and unlimited coins. It can pull the price up infinitely and crash it infinitely over a period of time; it only needs to change a number. But that accounting isn’t balanced—it creates a deficit. As long as nobody asks to settle by withdrawing coins, it can keep doing this infinitely. However, jiao易suo won’t wait until it “goes boom” to close the books. So-called “black swans” are basically jiao易suo staging and orchestrating things to seize the opportunity to close accounts.

Someone might wonder: are all jiao易suo synchronized like this? For example, would OKX, Binance, and Coinbase coordinate together to dump the market and pump it together? The answer is: they don’t need to be synchronized. One big exchange is enough. When the price of Bitcoin deviates, market makers will move the price back to parity, and no one would complain, because their own exchange also needs to settle their books.

Based on the understanding above: Bitcoin will clear the longs, but not too deep—and it will be a “pinprick V reversal” (a sharp dip followed by a quick V-shaped rebound).

Next, what everyone should do is place orders in the spot market. If you really want to play futures, when you start doing a pinprick V-reversal, open longs with a small position.

The essence of why people chase breakouts is: fear of missing out.

Hello, the money you barely managed to earn in the last cycle was lost because of this psychology—one moment of impulsiveness and it’s gone in an instant. The market is a scheme. Everyone is in the scheme. You win once, but it’s often followed by decline. Wins and losses alternate. The longer you stay trapped in the game, the sooner you’ll end up losing everything. We need to learn how to stop—wait for opportunities. The market never runs out of opportunities.

When Bitcoin keeps rising or keeps falling, if you’re not on the train, at least you haven’t lost money. A more rational approach is: when Bitcoin has been steadily rising or falling for a short time—up or down by about 20,000 USDT—then even if you’re still bullish, don’t jump back on. When it has risen too much, it will fall; when it has fallen too much, it will rise.

I know what everyone is thinking: fear of missing out, wanting to catch the top or the bottom. Don’t rush. When it’s moved by about 20,000 USDT, don’t rush to chase longs or set shorts. Learn to wait. Learn to give up. Don’t try to catch every fluctuation—otherwise you’re extremely likely to be stopped out and liquidated. Think about it: which positions are most likely to get liquidated? Isn’t it the ones opened at the tail end of extreme moves that are most likely to get liquidated? In the tail end of a move, if you take the wrong direction, it’s almost certain you’ll get liquidated, because when the reversal happens, the first thing to be eaten is you. For example, if you short near the bottom area, the first liquidation blast will be yours. If the market keeps falling, do you dare to go long against the trend? Or if it keeps rising, do you dare to go short against the trend? You’ll be taught a lesson in minutes.

When you’re deciding where to place a long during an uptrend pullback, you can look at the liquidation points of people who went long near the peak. Or during a downtrend, you can look at what levels the people who shorted at the lows got liquidated at. If you don’t know where liquidations will happen, then look at the levels corresponding to 100x, 20x, 10x, and 5x leverage. With this 87,300 peak: a drop to 87,000 at 100x leverage—about a 1%, 5%, 10%, and 20% move—approximately corresponds to: 86,100; 82,800; 78,600; 69,800. These are rough target levels. 86,100 and 82,800 have already been broken, meaning the long positions at 20x leverage have already been cleared. Next would be 10x and 5x. 78,600 and 69,800 don’t necessarily have to be fully wiped out, but if the price does make a move to clear them, then most likely it will reach those levels. Still, during this process, new positions will open—so you have to recalculate. If you can’t calculate, then first look at the liquidation heatmap, and then combine it with this kind of algorithm.

There’s another big pit in the crypto world: financing. Every day, thousands upon thousands of new projects come out, and not a few of them are funded. My view is: don’t touch them. If you see one, back away immediately. This is even riskier than contracts. This isn’t even “risk”—it’s basically throwing money away. It’s no different from directly holding your money and throwing it into a fire; once it’s gone, you can’t get it back. It’s all scamming. It’s really hard for new people now—there are traps everywhere.

The crypto world has already become seriously deformed. If it’s financing, almost all of it is full of con artists. Back 8 or 9 years ago, ICOs were still pretty good. But now, financing almost never offers good opportunities. Out of 1,000 projects, it’s not certain that even one will turn out well. What you’re thinking is about making 100x gains; what they’re aiming for is your principal. Even something as popular as PUMP has broken below its issue price.

Just remember this: good financing isn’t something ordinary people can access. The financing you can access isn’t good for much—almost all of it is aimed at taking your principal. Do good projects need to come out and promote themselves to raise funds? Do they need to get people like you to invest through financing?

Don’t compare it to Bitcoin or Ethereum from before. Ten years ago, just about any one of them could multiply many times. Now, any random one can just go to zero. There’s basically no comparability. Today’s crypto world is a lawless circle with no bottom line—an all-out free-for-all era without regulation, full of scammers.

Someone might argue that they participated in something that went 100x. I can only say: you were lucky. These opportunities are now extremely rare—more or less like buying a lottery ticket. You might as well play contracts; at least you’ll hear the sound. This is just a comparison, and everyone should also avoid contract leverage as much as possible. Don’t touch options either—you won’t even understand how to play them.

Don’t look for one example. An outlier doesn’t mean you are the outlier. The probability that you’ll be the outlier is one in ten thousand.

Crypto newcomers: if it’s financing you can actually access, it’s a harvest. Stay away—immediately.

I didn’t want to argue with some people, but the truth is, there are some people who just don’t know how to respect others.

First of all, when I post in the crypto space, it’s not to make money. I’m posting because I can’t stand the behavior of certain people, certain organizations, and certain exchanges. So I wanted to speak up—everyone’s been kept in the dark by them. And over a long period of time, their actions will inevitably affect my own interests. Because I’m a long-term holder. What they do is harmful to long-term holders. I’m here to vent a bit and, at the same time, share some personal experience. If it happens to touch on someone’s interests, then sorry—I’ll keep posting.

I’m only here to tell everyone about some traps in the crypto world and my own experience. I want to tell ordinary people how to trade by thinking like the “whales” (the market makers). Help everyone build their own trading system. And I’ll share how to trade against human nature. Also, tell you to play spot trades as much as possible and to do as little futures trading as you can, because futures, in essence, are gambling.

Only when more and more people move away from futures will Bitcoin be able to enter a long bull cycle. Bitcoin’s current opponent is futures! You need to know who your counterparty is—can you outplay them?

Crypto is a place where things grow wild. Can you outplay it?

Everything you’ve done, I’ve done for you. What I’m saying to everyone is meant as a warning with no other purpose: before, I also did an experiment—of course, to find a way for long-term holding. In the end, I found that holding in the direction of ETFs is very suitable for long-term holding. If you go the wrong direction, it’s just too inappropriate. I bought 5x Bitcoin and Ethereum ETF on Gate with more than 2.7 million. Now it’s down to just over 0.5 million.

ETF characteristics are: when it goes up, it goes up faster—rising doubles your leverage more quickly because it automatically expands the multiplier. When it goes down, it’s the same—falling faster the more it drops. Bitcoin rebounds back to 120,000, and the over-2 million also comes back. The prerequisite is that you can’t go against the big trend. Otherwise, a 20% move in the opposite direction can wipe you out to zero.

I was also looking back then for a method to long-term hold with leverage lower than 5x. Now the conclusion is: low leverage with the “coin as the base” (spot/coin-denominated holdings). ETF with 3x is still playable. But 5x is too high.

Let’s see whether this kind of situation could happen: a fake fall in early October, followed by a V-reversal. This kind of maneuver exactly fits the maximum self-interest.

The fake fall attracts everyone to short, then pushes the price downward like a needle. That perfectly matches many people’s expectation that October is a bear-market bottom. Then everyone starts chasing shorts, expecting the price to drop so they can buy the dip. After that, they give everyone a V-reversal. They harvest both longs and shorts, kicking off a bull market.

There are always people urging me to recommend a few small-cap altcoins. I basically don’t suggest buying altcoins. If you really insist on recommending some: ETH, AAVE, LINK, BNB, XMR.

Let me remind everyone again: how to tell whether a KOL is real or fake:

First, see whether a KOL is useful to you, or whether they’re just a fraud.

Here are a few points:

1、Do they take orders or not? If they take orders, then all of them are shysters—without exception. They can’t make more than you can yourself. And they can’t match your level. Why? Because to make their data look good, what they show you is all fabricated. And real money-makers won’t come out to teach others and take orders, and profit off everyone’s pocket change. If someone truly makes money through trading, they don’t need to go out and scrape together the “three or five bucks” from everyone.

2、They talk about Bitcoin price levels—saying that the levels have been unchanged for 800 years. They insist on it. But financial markets are ever-changing; they won’t stay the same. Today it’s support—tomorrow it’s a trap. Today it’s pressure—tomorrow it’s the starting point.

3、They teach everyone to trade frequently—800 directions in a day, and they want you to catch every swing. Anyone suspected of frequent trading is water, and that’s as watery as it gets. How to judge whether it’s frequent trading: if you trade more than 5 times in a month, that counts as frequent trading.

4、Watch whether they have “main-force (institution) mindset.” What is that? It’s a way of thinking that uses news to harvest retail investors (“cabbages”). The more you watch the news, the more you become a cabbage—please understand that sentence.

Real, useful KOLs: those who don’t take orders; those who only teach people to build their own trading system; those who teach contrarian, anti-instinct trading; those who teach reverse thinking; those who teach an institution/main-force mindset; those who teach people to reduce trading frequency; and those who teach how to break down the truth behind the news.

Let me point out an issue that many people might overlook. I’ve mentioned this viewpoint before:

Actually, the previous bull-top was in August, not October. October was basically a pattern of price probing up and down—like inserting pins—to clean out short positions and long positions. If you look at it this way, then this year’s July rally topping occurred a month earlier, reaching the bear-bottom sooner. Doesn’t that feel more reasonable?

If that’s the case, what should everyone do next?

You should guard against stop-hunting that cleans out long positions. Don’t short. Instead, place buy orders for spot holdings near the centralized liquidation/clearing zone on the futures side. For small dips, buy a little; for bigger dips, buy more.

Long ago, I told everyone: the top of the last bull market was in August, not October. I also reminded everyone that the previous bull market hadn’t reached its full target, and the bear market wouldn’t fall too deeply either. If you calculate a 70% drop, you should base it on a drop from 150,000—not 126,000. Everyone is waiting to “buy the bottom,” but you won’t be able to pick the real bottom. It won’t give you that opportunity. I also said the market would bottom earlier—it wouldn’t wait until October to bottom. And I called out “get on board” around 62,000.

Now I’m telling everyone again: based on this viewpoint, think a bit more about how to trade and adjust your strategy.

Bitcoin keeps poking downward then pulling back; long and short positions are locked in stalemate, and it feels like it’s a bit unable to fall further.

Right now, the whole market still hopes Bitcoin will drop so they can buy the dip.

Will their expectations be met?

If at this time Bitcoin rises again above 85,000, everything will move higher—8.7 has already been tested twice. The third time will go even more smoothly and move higher.

Everyone should have read the news in the picture, right? Okay, now think about the ideas you just had: think about this—1, 2, 3, stop thinking.

Retail investors: It’s over. Based on past experience, it’s going to plummet. China is cracking down hard on virtual currencies, and cracking down hard on Bitcoin.

First of all, the interpretation in the picture is not a strict ban on virtual currencies or a strict ban on Bitcoin. What it strictly prohibits is this: virtual currencies cannot be used for circulation as currency, but they can be used for circulation as goods. They are not legal tender. That means your profits and losses are your own—you can’t lose money and then sue, because the law doesn’t support your claim. It prohibits activities like providing trading services and illegal operations. But it does not prohibit you from personally holding and trading.

“Whatever the law does not prohibit is lawful.” The law is严谨, and it does not directly say: it is illegal for individuals to hold Bitcoin, or illegal for individuals to trade Bitcoin. It just says that providing trading—such as if you open a trading platform—that would be illegal.

Let’s put it more plainly: is it illegal for two individuals to do this—one person gives U to the other, and the other gives RMB to the first person?

My answer: it’s not illegal, as long as your funds are legal and there’s no involvement in foreign exchange trading, helping someone do illegal activities (帮信), or fraud. A normal U trader is not illegal. In fact, U traders are also individuals trading peer-to-peer with other individuals. The platform they operate on is what is illegal within China.

So the key for a U trader is to judge whether the people you trade with are ordinary normal people, and whether the source of the U is not U from telecom fraud, and whether the money is not fraud money. If you do that step well, then it’s not illegal.

Ordinary people worry they won’t be able to exchange U: but having said that, you just need to make sure the other person’s money isn’t dirty. First, you can only judge as best you can—there’s no way to completely eliminate risk. You can choose a U trader who has been doing it as a business for years, then add them as a WeChat or Alipay contact. Don’t pay directly via QR code; instead, ask them to transfer to your account. Check their transaction history (a lot of days of activity). If there’s transaction history, your risk is much lower, because then you’re not the first person directly handling fraud funds—you’re more like a second-tier participant.

Next, I’ll explain the next post in detail.

The essence of trading is mindset:

Everyone, remember this: if you miss the market and you feel that Bitcoin has gone up too high, then you think it will fall—so you short it. Everyone, don’t do it that way.

Because if you do, you’ll be extremely miserable. The market teaches you how to be a person—it’s a specialist that deals with every kind of defiance. You’ll face a situation where you not only weren’t on the train and missed the upside, but you’re also trapped and at risk of liquidation. That’s a double blow.

Have you noticed that trading is really about trading the mindset? If you short against the trend, you’ll get carried away. The position gets bigger and bigger, losses get bigger and bigger. By the time the rise truly peaks, your principal is gone, and you no longer have money to keep opening positions—the mindset collapses completely. You should wait. There are many opportunities. If you miss this one, just wait for the next.

This doesn’t mean you can’t short. When is it possible to short? When you have a lot of spot holdings. When the price has risen a lot, at this point you can sell part of your spot holdings or not sell, and open a small short position. This is called hedging, and you have absolutely no psychological pressure. Because when it rises, even if your short position loses money, your large spot holdings make money. Even if you get liquidated, it doesn’t matter. What if it falls? Then the short position makes money. Even if your spot holdings lose money, you can use the profits from the short to bottom-fish and buy more spot. The spot will rise again eventually.

So you have zero pressure and your mindset is extremely calm. Then your trading system will be even more complete.

What do you think about the event where Bitcoin ETF inflows reached $1 billion yesterday? First, use your own way of thinking.

Alright, 1, 2, 3—stop, stop thinking.

I bet you’re thinking like this: Institutions collectively made a massive inflow—there must be some unknown secret behind it. Quickly follow the institutions’ lead, come on, let’s rush in!

Alright, let me give you an alternative logic:

1. First of all, the group behind this ETF that buys it includes some institutions, family offices, some large whales, and some retail investors. Where there is buying, there is also selling, right? Everyone only sees the $1 billion being used to buy in—so who is selling the $1 billion worth of Bitcoin?

First, let’s rule out retail investors, okay? Retail investors aren’t on the train. So where does the Bitcoin used to sell that $1 billion come from? Then who is it? It’s not institutions or family offices, not retail investors—so what’s left is: whales and trading venues.

So we need to look at the Bitcoin market and figure out who’s really in control.

2. Such a massive buy—in terms of the relativistic idea—doesn’t it imply that the subsequent inflow funds will be less than that $1 billion? The higher the price gets, the more it will relatively hinder them from continuing to flow in. In other words: if it keeps rallying, their desire to sell will be greater than their desire to buy. That $1 billion inflow, relative to what comes later, isn’t just a “support board”—it’s a sell order.

Can you understand what I’m saying?

We should enter the market before the inflow happens, and even buy while liquidity is flowing out—not wait until after a massive inflow to buy. Do it early, trade early, not late.

Everyone should be cautious: Bitcoin may surge again. There are two possible scenarios:
1) It drops directly to where long positions get wiped at 8.2–7.8, and then continues to rise, surging toward 100,000.
2) It first rises to 8.9, then falls to below 8.2 where long positions get wiped, and then surges toward 100,000.

Let me ask everyone a question: Right now, Bitcoin’s market cap is $1.8 trillion. If we want to pull it up to $3.6 trillion—that’s about $170,000 per Bitcoin. In your impression, how much money is needed? Do we need a pullback of $1.8 trillion in capital? Does a Bitcoin pump require a lot of money? However, that’s not the case.

Many retail investors, including some old “long-term bagholders” who have been through it before, have a misconception: that dumping Bitcoin is easy. You don’t need much capital—just sell coins to raise cash, and that’s enough to smash the price down. But to pump Bitcoin, you need a large amount of capital. To push it to $170,000 requires massive funds. The market simply doesn’t have that much money.

Anyone who thinks this way is just a “rookie investor” (a bagholder with a flawed mindset). Reality is exactly the opposite of what you think.

Now I’ll tell you the answer: A Bitcoin pump may require no capital at all. And not only does it not require capital—it can actually take more capital back from the market. When I say it doesn’t require capital, I don’t mean it’s free and you don’t need even a penny. What I mean is this: the “operator” (the big player) often needs some initial capital to start the pump. Then they push the market up with a big bullish candle, and after that, they start the pump while selling at the same time. Then they continue pumping while selling again, drawing more people to keep buying. In the end, at high prices, they finish distributing the chips (offloading their holdings). It not only costs nothing in terms of spending, it actually cashes out the “U” (USD equivalent) from everyone’s hands.

When Bitcoin’s price rises, it’s not only because more money flows into the market. It can also rise by stepping on the left foot while the right foot steps up. And in most cases, market uptrends are basically the process where the operator distributes chips and cashes out from high positions.

The same logic applies to downturns. The operator doesn’t necessarily sell a large amount of chips outright. Instead, after selling one batch of “dumping” chips to smash the price, they buy up at low levels to harvest the chips held by everyone else. They smash while buying. The act of dumping is actually accumulation, not distribution.

Just think about the logic: if you hold a lot of Bitcoin and you want to sell, would you say Bitcoin is good or bad? Should you then go ahead and release endless positive news? Are you going to sell when retail investors are rushing into the market with funds, or sell when retail investors are panicking and dumping? When you don’t have any coins in your hands, do you release positive news? Shouldn’t you instead release negative news?

That’s the difference between retail investors’ thinking and the operator’s thinking. Retail thinking: Look, positive news is being released—quick, buy! The operator is pumping and giving us money. Wow, negative news is coming one after another—run! The operator is about to跑路 (run away).