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Details: ht
In the ups and downs of the Crypto Assets market, a simple yet powerful tool has helped me through tough times—volume-price divergence analysis. This is not mysticism, but a trading strategy tested in real-world situations.
Price-volume divergence is a barometer of market direction. When prices reach new highs while trading volume shrinks, it often signals that a peak is imminent. Conversely, when prices hit a bottom and trading volume decreases, it may indicate that a bottom is near. This insight helped me exit in time before the market crash in 2020, avoiding significant losses.
There are two types of volume-price divergence:
1. Top Divergence: Price rises but trading volume decreases, which may be a signal that large funds are quietly withdrawing.
2. Bottom divergence: Price declines but trading volume shrinks, which may indicate reduced selling pressure and that large funds are beginning to accumulate positions.
However, simply identifying divergences is not enough. Real trading opportunities often appear during the pullback confirmation phase after a breakout. When the price pulls back without breaking key support levels, and the trading volume increases moderately, it is often a relatively safe entry point.
Based on years of trading experience, I have summarized the following trading principles:
1. Volume changes usually precede price movements.
2. Build positions in batches, do not fill the entire position at once.
3. Analyze by combining multiple time frames.
4. Market sentiment is often contrary to the best trading opportunities.
5. Take a proper break to adjust your state after consecutive losses.
By following these principles, I have achieved considerable gains in the recent RWA (Real World Assets) sector. The market is always full of opportunities; the key is to maintain rationality and discipline. Through systematic analysis and strict risk management, ordinary investors can also achieve steady profits in this market.
The crypto market is changing rapidly, but only those who survive have the opportunity to make money. I hope these insights can light your path forward, helping you navigate the opportunities and challenges in this market and ultimately achieve success.