Conversation with Technical Experts: BTC Spot Analysis (QA Review)

Today we have specially invited a technical expert, let me introduce our guest for this episode - Teacher Yaoxing!

Teacher Yaoxing is a “veteran” user of AiCoin, definitely an industry OG, and also a highly popular big V on our Dynamic Square. After many years of navigating the industry, he not only has unique insights into industry trends but also possesses a sharp investment intuition. Whether it's the strategies of the secondary market or the slightest news fluctuations, he's well aware of them, and he has put in considerable effort in studying K-line charts.

This time he specifically came to share with everyone, the theme is “Trends, Reversals and Practical Operations”, all valuable content, let's quickly get to the point～

First question: Recently, BTC has been fluctuating around 110,000 USD. What is your view on the current market rhythm and trend?

Teacher Yao Xing: I think the current trend is quite healthy, and the upward momentum hasn't been broken. To be honest, I've never had a good feeling about “rapid rises.” After so many years, I've suffered too much from liquidation losses in the early days, and this lesson is deeply ingrained — rapid rises often conceal risks, and it's more solid to have a rhythm of “three steps up, two steps down.”

I think the core focus of the market right now should be on Trump, to see if he can push the Federal Reserve to ease in his own way. Once the interest rate cut takes effect, there will be more “fresh water” in the market, and the market can gain more confidence.

However, many old investors are currently waiting on the sidelines, unlike me, who laid out a considerable amount at a low position early on. From the current perspective, it’s not yet time to take profits and leave the market. Looking at the daily chart, the previous occurrence of a top divergence probably scared off a lot of people, but I took a look at the chip distribution K-line chart of your AiCoin, and the support price is roughly around 100,000, which is equivalent to having a “safety cushion,” making me feel more at ease.

By the way, there's another data point to keep an eye on - the fund flows of US stock ETFs. My friends and I, who are seasoned investors, usually keep track of this. If we notice a long-term continuous outflow of funds, we need to be more cautious, as it could be a signal that the market is about to change. That's about it for my views, thank you, host.

Host: Thank you, Teacher Yaoxing, for the valuable sharing! The teacher mentioned the need to pay attention to news related to Trump. Everyone can frequently check our AiCoin news module to see real-time updates as soon as they come out~ If you want to check support levels, just use our chip distribution function, which is super easy to use. It's a tool recognized even by the big players, so we can feel more at ease using it, right~

The second question: With frequent small fluctuations, how do you personally distinguish between a “local pullback” and a “true reversal”?

Teacher Yaoxing: In fact, I rarely focus on the lower time frame charts now, but regarding this issue, I can share my own “bloody history” of liquidation from my early years.

When I was young, I was particularly obsessed with trading contracts, always feeling that there were frequent fluctuations in small timeframes and opportunities to make money everywhere. Every time I made the right decision and watched the numbers in my account rise, I felt particularly elated, not only showing off to my friends everywhere but also pulling everyone together to study, just to flaunt those little profits.

But now that I think back, focusing solely on the small time frames has a very low tolerance for error — once you make a wrong direction call, especially when encountering a one-sided bullish or bearish market, if you stubbornly hold on without admitting defeat, the losses can be devastating. Take the incident in 2020 when ETH fell below 200 dollars; I ended up getting liquidated, losing a huge amount. Now looking at ETH having risen to 4600 dollars, it's really a case of time passing, and just thinking about it feels regrettable.

Since then, I no longer need to simply rely on K-line techniques to distinguish between “local pullbacks” and “true reversals.” I believe the key lies in observing the “overall trend,” which is hidden in policies and also in the flow of capital. Let me mention the trading in 2020 again; at that time, the pandemic led to an economic downturn, and I was wholeheartedly committed to going long. I was young and had strong beliefs, but I couldn't hold on until the moment when global liquidity was released, and as a result, I faced liquidation.

So, when it comes to judging reversals and trends, it's really not enough to just look at the K-line; you need to first understand the macro fundamentals. When the trend is right, looking back at the K-line will give you more confidence. It's like what people often say, “When you're on the right wind, you can fly higher”; the same principle applies to stock and cryptocurrency trading.

Extended question: In the case where the major trend has not changed, where are retail investors often prone to misjudgment?

Teacher Yaoxing: I think the most common issue is “operating blindly based on feelings”. This habit is really not suitable for most people. If one’s market intuition is poor, it’s very easy to make mistakes. Many people see signals that theoretically correspond and then believe their judgment is 100% correct, completely unaware of how to develop a trading strategy, relying entirely on passion.

Over the years, I have summarized a few principles that I must abide by, and I would like to share them with everyone: First, do not blindly try to catch the bottom, and do not stubbornly stick to one direction; be flexible. Second, make sure to implement stop-loss effectively; when trading, focus on preserving your capital first, then think about making profits. Third, do not take on too heavy a position in contracts; leave yourself a way out.

I basically no longer play contracts with heavy positions now. After more than ten years, I have seen too many ups and downs, and instead, I have become more “timid”. So if a bull market occurs, please don’t come to me for a chat; I will definitely advise you to stay calm and not get carried away by the market.

The last question: In actual trading, how should stop-loss and take-profit be set to both follow the trend and avoid being shaken out by fluctuations?

Teacher Yaoxing: This brings us back to what I just mentioned about “preserving the principal first.” I am used to using AiCoin, and my favorite feature for analysis is the chip distribution function. It helps me understand the cost of the chips that have been traded previously, and where the support and resistance levels are, so I have a clear idea. As for how to use it specifically, everyone can find tutorials online and learn, it's not difficult.

For example, if you are bullish on a certain coin, when setting a stop loss, you should set the level slightly below the cost of the previous dense area of chips. This approach is equivalent to betting on this rise, using an “opportunity cost” that is lower than the market average cost. Even if you really make a wrong judgment, the loss can still be controlled.

I usually analyze from a more capital-oriented perspective, and some friends prefer using Fibonacci. They do find it handy, but I always feel that this method has a bit of “mysticism” to it, and I can't quite get over that mental hurdle. I still trust the logic of “capital cost” more. However, everyone can learn another tool; either study the application of Fibonacci or thoroughly understand the chip distribution, and just find what suits you.

This article only represents the author's personal views and does not reflect the stance or views of this platform. This article is for information sharing only and does not constitute any investment advice to anyone.