Just a friend asked me, “$BTC has already reached 80,000. Should we directly enter the main uptrend?” I think this question can’t be answered by price alone. If the market keeps rising, but OI only increases moderately, the funding rate isn’t extreme, spot trading continues to expand, then I’d say the market quality is still pretty good. If it just goes sideways, but OI suddenly spikes, the funding rate quickly gets expensive, and social media starts filling up with people showing off their gains, then be careful. You can distinguish it like this:
First, check whether ETFs are seeing continuous inflows;
Second, see whether spot trading is keeping up;
Third, check whether OI is increasing moderately or rising vertically;
Fourth, see whether the funding rate has moved into a crowded zone;
Fifth, after the price rises, check whether a large number of addresses transfer the coins into exchanges.
The moment when the market most easily leads people to misjudge isn’t during a drop.
It’s at the very beginning of a rally, when everyone thinks they’ve finally learned how to trade.
First, check whether ETFs are seeing continuous inflows;
Second, see whether spot trading is keeping up;
Third, check whether OI is increasing moderately or rising vertically;
Fourth, see whether the funding rate has moved into a crowded zone;
Fifth, after the price rises, check whether a large number of addresses transfer the coins into exchanges.
The moment when the market most easily leads people to misjudge isn’t during a drop.
It’s at the very beginning of a rally, when everyone thinks they’ve finally learned how to trade.