The second half of the bear market is a transitional phase. It may not necessarily continue to hit new lows, but rather spend more time building a bottom—performing one action while secretly preparing another. Short sellers must be cautious. The situation has changed significantly from mid-May to the end of June. The correction from mid-May to the end of June was caused by a combination of factors, including market concerns over policy uncertainty due to the Fed's leadership change and Japan's interest rate hike. Entering July, Walsh has shown a style that appears hawkish on the surface but is actually dovish underneath. The June nonfarm payrolls not only shattered expectations of a Fed rate hike from October to December but also violently kicked open the door to rate cuts in the second half of the year. This dramatic reversal is laying the foundation for the coming transition from bear to bull market.

Many friends always think that in a bear market, you should only short, and they will take short positions without setting a stop loss. Once they are trapped, they panic. For example, on July 2, ETH suddenly rose from 1596, directly broke through 1700 to 1722. My long take-profit point was 1672, and the defense for the short entry at 1672 was 1689. Some people didn't set it in advance. Think about how cheap this defense is—it allows you to maintain the initiative for shorting at highs. But once you are trapped from the beginning, after two consecutive days of rising, you will be passively locked in and in danger. Then you will miss out on subsequent opportunities. When others profit, you can only wait to break even. The gap is huge. Will shorting in a bear market avoid losses? If the market doesn't continue to fall, won't you be doomed? After all, compared to a bull market, the current levels are still at the bottom.

Of course, during the rebound, you also need to bring your defense. For example, if the market breaks below the previous day's low on the same day, you should move your defense to the lowest point of two days ago before re-entering.