In terms of market conditions, the price has already fallen below the 90,000 mark, dipping as low as around 88,000.
From an overall structural perspective, we have clearly indicated a high probability of reaching a peak in the high zone, followed by a reversal. Starting from the hourly level, the reversal structure has gradually been confirmed and has extended to the daily and larger time frames, maintaining the view of a continued bearish structure.
- Review of Peak and Trend Judgments
It should be noted that this is not just about judging the peak at high levels. During the previous "uptrend - pullback - further uptrend" process, we provided relatively clear judgments on key points for both the uptrend and the pullback.
For example, we repeatedly emphasized that 98,000 was the limit for the rebound, with the range between 98,000 and 99,000. Ultimately, the price indeed stopped around 98,000 before starting to decline, which laid the foundation for the subsequent structural reversal.
- Risks of Going Long on Rebounds
Looking back at yesterday, the price has clearly fallen below the key support level of 94,000. In this situation, many people might want to bet on a rebound after a sharp decline, but from a trend trading perspective, the cost-effectiveness of such operations is not high.
Once the trend confirms a reversal or clearly continues, the principle should be to focus on one-sided trading. In a volatile market, one can trade both long and short, but in a trending market, especially after a significant breakout, betting against the trend for a rebound has limited space and higher risk.
Moreover, after a sharp decline, there has not been a quick recovery V-shaped structure in a short time, indicating that the price has not yet entered a true buying zone. After a sharp drop, it is merely a low-level consolidation with weak rebounds, which is more likely to evolve into a "continuation of decline after consolidation" structure.
Therefore, entering short positions at levels like 93,000 and 92,000, whether for short-term or trend shorts, still has considerable downside potential within the 24 hours from yesterday to today.
- Confirmation of Structure at the Daily Level
From the daily level, this segment of the trend has provided relatively clear signals:
Six consecutive days of closing in the red, with each red candle's body gradually enlarging, indicating that the range of decline is expanding, which is a typical sign of a volume increase in the downtrend.
Determining whether there is an increase in volume is not complicated; one only needs to observe the size of the range from the opening price to the closing price of the candlestick. If the body is gradually enlarging, it indicates that selling pressure is continuously increasing.
Structurally, 94,000 is the most critical support level. Once it is broken, there is almost no effective support below. The buying power that formed in this segment has been gradually liquidated after reaching the high point, which is also an important reason for the market entering an acceleration phase after breaking down.
- Current Stage of Operational Thinking
First Situation: Friends who already have short positions
If you have medium to long-term short positions established at high levels, you can continue to hold or reduce positions in batches, but there is one principle that must be followed:
After making a profit, you must move the stop loss.
You can earn less or even not earn at all, but you should not turn a profitable position into a losing one.
Second Situation: Friends who are currently flat
If you have missed both long-term and short-term short positions, it is currently not recommended to directly chase shorts at this position. Missing out is missing out; patiently wait for the next round of structural adjustments.
This segment of the decline is more inclined towards a single-phase market, and whether it has ended is still uncertain. One should wait for it to complete, and only after a new adjustment appears and a phase high is formed should new short positions be considered. Only when a phase high appears will the defensive position be clear, and the trading structure will be complete.
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