Altcoins fell more than 50%, will the market outlook be stable? How much will BTC fall? Will 312 happen again?

The market fell as expected. In last week's capital analysis, it was clearly pointed out that US dollar funds have been retreating continuously. And it is Asian funds that are taking over, but Asian funds are often not sustainable.

However, what is surprising about this decline is that the decline is relatively fast and does not feel like the previous top. Now most altcoins have fallen by about 30%, and many have fallen by 50%.

In fact, at the beginning of the decline, we will have the irrational impact of the representativeness bias in behavioral economics, and most retail investors will not feel panic. In the past two days, I started to feel a little bit panicked. Then there are a few questions you need to think about:

Question 1: Do I need to cut the flesh at this location? It would be unwise to cut the flesh at this location.

From a technical perspective, the current position is horizontal support and the lower boundary of the descending channel, with double support. And altcoins generally fell more. Judging from the short-term market conditions of a few days, even if it falls, there is a high probability that it will be a pin. In addition, judging from historical experience, even if Bitcoin has a big decline, an effective rebound will often be organized during the first wave of decline. Because there will be a lot of funds here who will think this is just a callback in the rising process and will buy at key positions.

Of course, this is only a high probability. If a small probability situation occurs, don't stare at the rebound. If the Air Force is particularly strong, it may continue to decline. The basis for judgment is very simple. It fell below 5.9w on heavy volume and cannot be recovered.

Question 2: Follow-up market trends

Many people think this is a pullback in a bull market. This cannot be said wrong, but the callbacks may be large or small. I think the weak market will continue for 1 to 2 months in the future, and there is a high probability that this will not be the end of the correction. Because BTC has experienced a 6-month rise since it started rising in mid-September last year. The overall market has gone through a complete cycle. Major copycats have generally risen, sectors have rotated, and many funds have made a lot of money. The entry of funds into the market has become very tense. To give a simple example, last week there was an additional US$1.3 billion in stablecoin issuance, of which USDT was an additional US$800 million, but BTC still went from 7.30,000 dropped to 62,000. Every time after a complete market movement, the market needs to be reshuffled to squeeze out the bubbles.

Question 3: How much will btc fall?

There is no answer to this. The main reason is that the financial power of BTC ETF has increased. The daily trading volume of ETFs is US$4 billion to US$6 billion. In comparison, Coinbase's trading volume is US$2 billion, and Binance's daily trading volume is US$6-8 billion. That is to say, ETF funds have become a very important force. However, due to the opening period, we do not understand the style of ETF funds. I have said before that those who think that ETF funds will continue to buy are definitely wrong. Many times we need to realize what we are not good at, rather than making subjective assumptions.

Question 4: Will 312 reappear?

When it rises, it looks at 150,000, and when it falls, it looks at 312. This is a common problem in the currency circle. After the decline, many 312 comments reappeared. I'm not saying it's completely impossible. However, 312 reproduction must meet two conditions:

1) The funds on the market are exhausted + high leverage,

2) The sharp drop in U.S. stocks.

Now the first condition can be said to be basically met, but it is difficult to predict that the US stock market will fall significantly. The U.S. stock market has the smartest minds in the world watching, and it is impossible to predict with certainty.

And what we can do is,

1) Avoid risks, such as not using leverage, and don’t think that low leverage means you feel safe.

2) When signs appear, be extra careful. Because the normal correction of US stocks will not bring about 312. Therefore, if there is a continuous sharp decline, it is superimposed from one decline after another. When you find that the U.S. stock market is continuing to decline, just reduce your position as a risk aversion.

Question 5: Follow-up trading strategy

1) For the short term of a few days, it is not wise to cut the meat. As long as there is no leverage, just hold it with confidence and wait for the rebound. If the position is relatively large, wait for the rebound to reduce the position a little.

2) I will place a pin order and choose the changes that are more popular before the decline, plus the ones that have a larger decline. For example, sol and ecology, MEME currency, etc.

3) If it rebounds, judge the subsequent trend based on the strength of the rebound.

4) My current position is very low. Be mentally prepared for the possibility of making mistakes. In other words, BTC can also rise directly.For me, it doesn't matter if it goes up. After Bitcoin rises, the sector will rotate. Just look for opportunities during the rotation.