The Survival Path in Market Cycles

The investment world is full of challenges, and very few can survive and profit in the long term. It is a brutal game that requires wisdom and patience.

Economic and market fluctuations are cyclical, and the alternation of bull and bear markets is the norm. Every investor should find a survival strategy that suits them, which requires a deep understanding of their own nature. Some are skilled at short-term trading, some focus on fundamental project investments, and others carry out cross-cycle layouts; each person's strategy is different.

However, one point is worth noting: in the long run, focusing excessively on short-term price fluctuations often leads to poor investment results. When a person easily profits from frequent trading, it is easy to develop blind confidence. Ultimately, the market will redistribute gains, and whether one can truly earn and retain profits largely depends on the investor's psychological quality.

Investment or trading activities essentially reflect a person's inner qualities, such as the balance between desire and self-control. These factors determine people's specific actions: buying, selling, or holding. Each decision has its underlying logic, based on individual understanding and judgment of various aspects like money, fundamentals, speculation, market trends, and more.

As the ancients said: "It is not external things that are moving, but the human heart that is moving." In other words, the fluctuations of the market actually reflect the fluctuations of people's inner feelings.

The real question worth pondering is not "When will it rise? How much can it rise?" or "When will it fall? How much can it fall?" If you lack confidence in a particular investment, it's best not to hold it; otherwise, it may continue to affect your judgment, leading to subsequent operational mistakes and ultimately resulting in failure. If the mind is unsettled, behavior will definitely be chaotic.

Hotspots and Temptations

The investment market is always full of temptation. In a constantly changing environment, hot topics emerge one after another, driving people to chase after them. Those who plan ahead may reap substantial rewards, while latecomers often face high risks.

For true industry builders and long-term investors, they are more concerned with the development of fundamentals rather than short-term price fluctuations or market cycles.

In a bear market, projects with solid fundamentals, such as certain metaverse and crypto gaming projects, may perform relatively more robustly due to their stable user base. Nevertheless, they still struggle to completely escape the influence of macro trends.

Even in a bear market, market hotspots still exist. This is an inherent characteristic of the market, regardless of bull or bear trends. It's just that in a bear market, there is less liquid capital, and fewer people can profit from it.

It is worth noting that temptation often hides traps behind it. The greater the temptation, the deeper the trap may be.

Participants in the Cryptocurrency Market

The crypto market is primarily driven by two groups: one that seeks to outpace inflation and another that hopes to outperform Bitcoin or Ethereum.

This structure has a significant impact on market development.

The first type of group, such as traditional financial institutions, will allocate funds to the cryptocurrency market and drive up prices when they believe that crypto assets can yield returns that surpass inflation. Conversely, if they believe that fiat currencies perform better, they may withdraw their investments, leading to a price decline. This group of investors is usually not native players in the crypto industry, but their large capital can have a significant impact on the market, especially during bear markets.

The second group consists of the core supporters of the industry, who have driven the development of Bitcoin, Ethereum, and later fields such as DeFi, NFTs, crypto games, the metaverse, and Web3. Although they also pay attention to changes in value relative to fiat currencies, they focus more on whether they can outperform BTC or ETH. This group often becomes the backbone of the market during bear markets.

Rationally Viewing Full Position Operations

In any market, the primary goal is to ensure survival rather than pursue short-term high returns. Full margin trading may indeed bring considerable profits at certain points, but for most people, this is not the best option. Once you attempt full margin trading, it can easily become addictive, leading to repeated risks. Individual success stories do not indicate that this is a desirable strategy; from a probabilistic perspective, the risks of full margin trading usually outweigh the potential rewards.

Conclusion

The world is complex and ever-changing, and there are no absolute correct investment rules. The above views may not apply in certain situations. Everyone should examine their own hearts and find an investment path that suits them. This is where true wisdom lies.