The Market’s Asleep—You Shouldn’t Be

• MUBARAK (Fox): Telegram short hit entry at 0.16273 and nuked down to 0.13341 for an 18% unleveraged move to the downside

• TON (Fox): Telegram short hit entry at 3.487 and nuked down to 3.402 for a 2.45% unleveraged move to the downside

• XRP (Fox): The newsletter short hit entry at 2.4093 and was nuked down to 2.2214 for a 7.8% unleveraged move to the downside

• SOL (Daniel): TG long entry 124.85, alerted late around $125 and hit 126.89 for scalp win; I told people to close at 126.60 in 30 minutes of trade time

Bull Market Genius Syndrome

We’ve seen it a lot this cycle, first in March last year and now again this year.

It’s a plague that takes everyone and their grandmother. Everyone except a few who learned about basic market structure and risk management.

I’m talking, of course, about Bull Market Genius Syndrome, a grave condition that ravages the portfolio of poor souls who never learn.

Every time the market pumps for an extended period of time, a new group of “traders” hit it big. They mistake easy market conditions for their own skill and get cocky. 

They always give their gains back to the market.

This happens because these traders never learned risk management and don’t understand how to identify shifts in trends. Today, we’re discussing this.

How to spot the bend at the end!

“The trend is your friend until the bend at the end.”

These are wise words to trade by, but how do we find that final bend? It just requires some simple Technical Analysis (TA).

The first thing to look out for is accumulation or distribution. These are fancy terms for a specific kind of market structure, let’s look at an example of distribution on Bitcoin from last cycle.

The first thing to notice here is how it moves from a strong uptrend into a distribution pattern. It consistently slows down, with each pullback pumping a little less. What started as a vertical rally quickly became a mostly sideways consolidation.

Eventually price shifts from higher higher and higher lows to the first lower low and then lower high, this confirms your reversal and puts in a top.

If we were to flip this chart upside down, we’d have accumulation.

• Step 1: Look out for deceleration in trend strength

• Step 2: Know when to buy back into coins. Let’s take TAO as an example.

TAO ended its pump with distribution and then had a long, drawn-out downtrend. That is, until it reached key support and shifted from moving down steadily to moving sideways. This shift in market structure shows the first sign of life.

Once it broke from this downtrend, it moved into a sideways range with plenty of opportunities to accumulate.

When we buy coins again, we want an underlying reason for buying them, but just this trick of waiting for a “sign of life” will massively improve your chances of buying at or near the bottom.

If we get aggressive on the way down, we stand to risk way more for little gain, but just some patience can make you a lot of extra money.

For this specific chart on TAO, I started DCA-ing once it broke out of the blue line and traded in the sideways range, becoming more aggressive as my confidence grew. The important part, though, is that I had an invalidation.

If it failed to hold the bottom purple bar as support, I would stop out of my buys. This is the foundation of risk management, and you should always consider putting some kind of invalidation on your trades.

So the full rundown:

Step 1: Enjoy the ride up
Step 2: Look for deceleration to spot the tops
Step 3: Wait for the downtrend to shift into a new market structure and start to DCA.
Step 4: Define a point where you are wrong to protect your downside.

Step 5: Go aggressive as the trend shifts further in favor of upside (Higher highs & higher lows are great for this)

Remember, when looking for reversals in a downtrend, you should see a lower low into a higher high and a higher low. It's not a bunch of local higher lows into slightly higher highs; it’s usually a trap.

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