Source: Talking about Li and other things
The market has been rather boring in recent days, and Bitcoin seems to have re-entered a volatile market. The number of readings and comments displayed in the background is also relatively low. However, I prefer this boring moment, because every time there is a major change or adjustment in the market, everything often looks boring.
Remember we mentioned in the article a few days ago that if Bitcoin enters a consolidation market, some Altcoin may have new opportunities. As for the operation of holding positions, if you still don’t know what to do now, the easiest way is to ask yourself: If you haven’t bought this token now, then, would you buy this token at the current price?
If the answer is no, then please start making plans to sell the tokens you hold now.
In addition, in the previous article (May 29), we also briefly listed some macro factors that may affect the future market trends, as shown in the figure below.
Here we continue to take the US 10-year Treasury bond yield indicator listed in the Bitcoin Indicator Template Table as an example. Since April 6, the 10-year Treasury bond yield has risen from 3.88 to 4.43. As shown in the figure below.
But during this period, the US dollar index (DXY) fell from 102.6 to 98.8, almost approaching the lowest level in three years, as shown in the figure below.
If we compare the above 10-year U.S. Treasury yield and the U.S. dollar index chart together, we can find a very obvious change: the overall positive correlation between these two data indicators over a period of time seems to have broken down, that is, the trend since April this year has clearly shown a different trend. As shown in the figure below.
Isn’t it more interesting to compare like this?
Of course, there may be many reasons for this result, and the following possibilities cannot be ruled out:
1) The market's divergence on the outlook for the US economic development has begun to intensify. Because US Treasury yields have risen, but the US dollar index has not followed suit, it may reflect that the market is worried about the US fiscal deficit and debt risk issues.
2) It is precisely because the market lacks confidence in the US economy or US monetary policy that the market believes that other currencies (such as the euro) are more attractive and chooses to sell long-term US Treasury bonds. This is also a possible reason for the decline in the US dollar index.
3) Starting from around April 6, the TGA account (we have introduced in previous articles that TGA is a checking account opened by the U.S. Treasury at the Federal Reserve) has also undergone relatively obvious changes. The increase in U.S. Treasury bond supply caused by the changes in the TGA account may also lead to an increase in long-term U.S. Treasury bond yields, which in turn will depress the U.S. dollar index to a certain extent.
4) The US tariff war has led to some new changes in the relationship between different asset classes, the Fed’s policies are inconsistent with market expectations, and so on.
However, if we combine the recent trend of Bitcoin, it seems that the change in the relationship between U.S. Treasury yields and the U.S. dollar index is actually beneficial to the price of Bitcoin (and also to gold assets). In other words, if U.S. Treasury yields continue to rise overall but the U.S. dollar index does not follow, then some funds may continue to choose to enter Bitcoin (and gold) for risk hedging.
Of course, what we have mentioned above are just some data dimensions and simple considerations that are simply expanded based on the indicator of the US 10-year Treasury bond yield. The reasons that affect market price trends are generated by multiple aspects of the game. A single indicator or data can only be used for necessary auxiliary reference, DYOR.
1. Plan your exit plan in advance
But no matter how the market changes and fluctuates, don't forget that the ultimate goal of coming to this market is to make money with the help of our own abilities, rather than just giving away our lives with the idea of making money.
For most retail investors, if this is your first bull market, then try to put the preservation of principal (most of the principal) first. If this is your second bull market, then try to put the preservation of vested profits first. Otherwise, you may fall into a bad cycle and waste many opportunities in several cycles.
This matter can be summed up in one sentence: everyone should form their own buying and selling strategies.
But from the few messages in the background recently, some friends still like to ask specific questions about price fluctuations, such as: Do you think ETH can rise to $5,000 this year? I bought UNI at a cost of $15, and now I have lost a lot of principal. When can this coin rise to $15 again? And other similar questions.
To be honest, if I knew with 100% accuracy when a certain coin would rise or fall, I would immediately go long or short N times, and I probably wouldn’t spend so much energy writing articles every week to kill time. On the other hand, if you don’t have a clear exit plan during the bull market, and always make decisions such as buying or selling based on the opinions you hope others can give, then you may end up shooting yourself in the foot.
Take the UNI mentioned above as an example. If you are very familiar with and optimistic about the long-term development of this project, believe that it can rise to more than $100 in the future, and the funds you invested in this project are not in a hurry to cash out (that is, it will not affect the quality of your real life), then you just need to continue to hold it within the risk range you can bear. Otherwise, when you decide to All In at a cost of $15, you should plan your exit plan in advance. The so-called exit plan here is not only for the profit-taking plan, but also includes the stop-loss plan, that is, you should not just participate in the transaction with the single idea of "you can make money if you buy it".
In reality, many people always hope to wait until the market top before selling, but real investors don’t actually predict the market top, and don’t even care about the so-called market top. Compared with taking higher risks to wait for the possible top to accurately escape the top, they are more willing to sell in what they think is a safe range. These people will always be cautious in the upward trend of the market and pay attention in the downward trend of the market, which is exactly the opposite of the habits of most retail investors.
Many people also say that those who know how to buy are apprentices, and those who know how to sell are masters. Many people's problems may lie in "selling". As for how to sell reasonably, we have discussed this topic in the previous series of articles of Hualihuawai (such as the article in May last year, as shown in the figure below). There are many options for selling strategies, for example, you can sell based on historical experience, based on certain data indicators, etc. As shown in the figure below.
(The above picture is taken from the 2024 e-book "Blockchain Methodology" published by Huali Huawai)
After buying a currency, many people will hold on to it and hope to get their money back once they suffer a loss. They may even buy more as the price drops, hoping to get their money back quickly, until their capital is exhausted. However, based on some historical experience or data indicators, we can avoid this irrational mentality to a certain extent.
Everyone wants to make money when trading. Of course, making money after buying is the best result. However, there is another important point: do not be afraid of losses when selling. Instead, overcome the fear of losses and learn to accept losses within a controllable range . Timely and effective stop loss is actually a kind of trading wisdom. Unless you are doing long-term trading and are very optimistic about the long-term development of the corresponding project and do not care about any short-term fluctuations, then you can only buy and not sell within your risk tolerance (that is, do not consider the issue of selling).
Here is another simple example. If you are currently trading BTC in the short term, and you happen to buy at the historical high of $110,000, then you should make two plans:
1) Since you can accept and buy BTC at a high price, it at least means that you have seen a higher price before you decide to buy. If your short-term (within a few months) goal is to see 130,000 (that is, the current historical high of 112,000 US dollars will increase by 16%), then this position is naturally your stop-profit range. Instead of waiting until 130,000 and then temporarily changing the plan to continue to see 150,000 or 200,000. If you want to change the plan temporarily at that time, it is also best to sell some positions when the target price of 130,000 is achieved to maintain the liquidity of funds.
2) At the same time, because you are doing short-term trading, you need to set a stop loss position. Our conventional operation (simplest) idea is to consider stopping loss when the recent highest price falls back by 16%. The current historical highest price of BTC is 112,000 US dollars, so you can consider stopping loss around 94,000 US dollars.
Of course, the above is only a very simple operation idea and our own operation habits. The specific stop loss position should also be considered in combination with your personal risk preference and operation habits (for example, you can also use technical indicators such as Fibonacci backtesting for auxiliary reference). At the same time, it is not ruled out that the market will have a new reversal after the stop loss. However, the market will never lack short-term opportunities. As long as the liquidity is still there, there will be new opportunities. Otherwise, if you do not set a take profit/stop loss and are trapped in the cross margin, you will be very passive.
In short, in any market, almost everyone wants to buy at the lowest point and sell at the highest point, but the market will not give you this opportunity every time. I remember that we have mentioned the operation of buying and selling many times in the previous articles of Hualihuawai, and the position operation suggestions we gave have not changed, that is: when buying, try to buy in batches, and when selling, try to sell in batches. How much position ratio is used to invest in Bitcoin and how much position ratio is used to invest in Altcoin also need to be planned in advance, which will help you to continue to control your risk range in turn to a certain extent.
2. Losing money is worse than losing money
A few days ago, a friend left me a message saying that he had just transferred all the funds in the exchange to his wallet. He thought the wallet would be safer, but in less than a week, the funds in the wallet disappeared. He asked me if there was any way to get them back.
I asked a few targeted questions and looked at the operation records on the chain. It is likely that this was caused by the partner's wallet being authorized casually (phishing). The possibility of directly recovering the funds in this case is very low, and I am not a professional in this area, so I can't help.
I remember that in the past two years (2023-2024), we also organized and output a lot of content on wallet security through Huali Huawai, as shown in the figure below. However, since this year, I have rarely written articles on this topic, because the security issues of wallets actually only require attention in a few aspects, and the main focus is on personal operating habits and safety awareness.
(The above picture is taken from Huali Huawai's 2023 e-book "Advanced Blockchain Thinking")
Here we continue to briefly list a few safety precautions (write whatever comes to mind, in no particular order):
- Do not record or store the seed phrase in plain text on your mobile phone, computer or cloud disk, which are always connected to the Internet. Do not share the seed phrase with anyone. If you must use a mobile phone to record, it is best to shuffle the seed phrase according to the rules that only you can understand. Remember, once the seed phrase are stolen, lost or forgotten, the assets in your corresponding wallet may be lost forever.
- Don't put all your funds in one basket. Using a hot wallet is more for convenience. You can classify your hot wallets. Use different hot wallets for different purposes (such as airdrops, DeFi, testing, etc.), and the amounts in them also correspond to different amounts. As for hot wallets that store large amounts of assets, don't casually authorize protocols that you don't understand (such as unknown protocols or small protocols), or consider using cold wallets for large assets.
- Before doing any interaction and connecting to a wallet, be sure to carefully check the URL of the corresponding protocol (website). Do not click on links shared by others in search engines or social media, and do not download apps sent to you by strangers in a group, so as to avoid being phished or falling into a scam. You can consider adding some commonly used protocol links to your favorites.
- Because the names of tokens on the chain can be duplicated, if you want to participate in the transaction of MemeCoin type tokens, it is best to verify through the contract address, rather than just looking at its trading volume or price. The contract address is the only simplest and most effective way to verify the authenticity of the token. In addition to using the project's official website to query the contract address, you can also use well-known tools such as Coingecko and CoinMarketCap to search for the real contract address of the token.
- Once your wallet address is publicly used for some protocol interactions, there is a high probability that some phishing tx will appear in the transaction records. For example, after you transfer $10,000, there may be a phishing record of $10,000 immediately following. Fortunately, many wallets can identify such Scam tx and mark them. These Scam tx can be ignored. Do not directly copy the address in it for secondary transfer operations for the sake of saving trouble.
- When authorizing transactions, pay attention to the authorization limit of the wallet, especially for U. It is best not to authorize unlimited. At the same time, you can use the authorization cleanup tool that comes with the wallet from time to time to check potential risk authorizations and cancel them. In addition, pay attention to the use of some TG trading robots. It is best to create and use different new wallets instead of directly importing existing seed phrase wallets for the sake of convenience.
- Whether it is an exchange account or a hot wallet application, if 2FA can be enabled, it must be enabled. However, for the SMS function, it is recommended to use Google Authenticator or a hardware key instead to avoid SIM Swapping.
- Due to some special features, when you visit a website to conduct transactions or interactions, you may need a specific network line. At this time, it is not recommended to use public WiFi or VPN networks with unknown security. Try to choose and use some reliable network tools (sensitive topic here, hundreds of words automatically omitted).
- For newcomers, if you only perform routine operations on a daily basis, the safest place to store funds is actually a large exchange, such as BN and OK. In other words, if the amount of funds is not large, there is really no need to bother with a separate private key wallet (EOA wallet) or hardware wallet. If you need a wallet, you can also consider using the MPC type wallet provided by the large exchange. Of course, for old leeks, the safest one is definitely a wallet that controls the private key by themselves.
- There is no such thing as a free lunch. Don't be fooled by those who appear to be professionals/enthusiastic people, or so-called teachers/experts/bloggers. You may want to follow their trades to earn excess returns, but they may just want to empty your wallet.
In short, making money tests one's ability and mentality, while security is more of a self-responsibility and awareness. Hackers and scammers are everywhere, and they often take advantage of people's laziness and ignorance. Compared to losing money, the worst thing is to lose money or be cheated out of it.
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.
