Zhou Yanling: Why did the cryptocurrency market crash and how to deal with long positions being trapped? Check out the latest trading strategies here!
In the past few days, the cryptocurrency market has experienced continuous crashes, and many cryptocurrency enthusiasts have been asking Yanling about the reasons behind it. Here, I will provide a unified explanation for everyone:
Part of the reason for this wave of sell-offs is also due to a "time-triggered" algorithm program, which triggered sell orders at the same time for the past 7 trading days (every day at 10 am Eastern Time, coinciding with the opening of the US market). It is worth noting that this algorithm is still running on weekends, leading to a wave of high-frequency trading (HFT)-driven sell-offs and shorting, forcing leveraged long investors to surrender. Data shows that the cryptocurrency "market maker" Jump Trading is liquidating positions worth hundreds of millions of dollars by selling and shorting various cryptocurrencies worth billions of dollars during the worst liquidity market hours, while repeatedly consuming buy orders to ensure the worst execution prices, attempting to aggressively reprice cryptocurrencies. Since August 3, Jump Trading's cryptocurrency division, Jump Crypto, has seen an inflow of approximately $300 million to the marked addresses, while the company's wallet has seen an outflow of approximately $80 million during the same period, flowing to major cryptocurrency exchanges such as Coinbase, Gate.io, and Binance, with the fund flow still ongoing. Behind this liquidation panic, it is mainly driven by global stock market turmoil, geopolitical risks, and other factors, resulting in the liquidation panic that everyone has seen.
At this point, the market cannot be analyzed using technical analysis. Almost everyone is now in a state of panic. August 5, 2024, will be a historic day for the cryptocurrency market. For those who currently hold short positions in good positions, it is advisable to take partial profits and exit, leaving a small portion of the position to continue downward for safety. For friends who are trapped in long positions, if the entry point is not too high, you can appropriately seek opportunities for rebound to escape the trap based on the risk situation of the position (if you are unsure how to escape the trap, you can consult Yanling online for a detailed analysis). As for friends who are not in any positions, it is advisable to wait and see. The resistance level above for Bitcoin is at 55,000, and for Ethereum, it is at 2600. In terms of specific operations, continue to focus on shorting on rebounds, with short-term long positions as a supplement. At this time, all operations must be light, with prudence as the top priority, strict adherence to stop-loss, and no holding of positions. It is important to emphasize this three times.
Bitcoin Trading Strategy on August 5:
Short at 55,000-54,400, stop loss above 55,600, target 51,000-50,400. If it breaks below 49,000 again, continue to look at around 46,500.
Long at 49,600-50,200, stop loss below 49,000, target 52,800-53,700.
Ethereum Trading Strategy on August 5:
Short at 2410-2360, stop loss above 2470, target 2180-2100. If it breaks below 2080 again, continue to look at around 1900.
If it does not break 2150, you can participate in long positions with a light position at 2150-2200, stop loss below 2100, target 2350-2410.
【The above analysis and strategies are for reference only. Please bear the risks on your own. The article's review and publication may have lagging strategies and lack timeliness. Please refer to Yanling's real-time strategies for specific operations.】
This article is exclusively authored and shared by senior analyst Zhou Yanling (WeChat public account: Zhou Yanling). The author has been engaged in financial market investment research for more than ten years, mainly analyzing and guiding BTC, ETH, DOT, DOGE, LTC, FIL, EOS, XRP, BCH, ETC, BSV and other cryptocurrency contract/spot operations. If you need to understand more real-time community guidance, trap-solving consultations, and chart reading skills, you can follow the teacher's public account "Zhou Yanling" to find the teacher.
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