How to make a decision when the indicator shows a "buy point" signal? The "engraving" indicator is not the mainstream in my data analysis system, but we cannot ignore its reference value. On May 17, 2023, I shared a "BTC Trend Signal" consisting of the mutual changes in the average cost lines of investors in the short and medium term, namely "<1 month (red)", "<3 months (yellow)", and "<6 months (green)". According to the signal prompt (see citation): 1. Crossing the green line with a yellow line is "Buy Point 1"; 2. Wearing a yellow line on the red line is "Buy Point 2"; 3. Wearing a yellow line under a red line is a selling point ——Therefore, November 17th is "Buy Point 1" (BTC: $95000); Of course, in hindsight, we found that intervening here was a bit early, and although it provided an opportunity to understand the position, the holding experience was not good. (Figure 1) As shown in Figure 1, as of January 28th, the red line is higher than the yellow line, indicating the appearance of "Buy Point 2" (BTC $88000). Do we still need to buy according to the signal here? My opinion is: 'Don't buy' Although the winning rate of this indicator has been high in the past three years of this cycle, every time a signal appears and enters the market, good returns can be obtained. But upon closer observation, we can find the following two characteristics near the "buy signal": The distance between the red, yellow, and green lines is close, even sticking together; The cost difference between different groups is not significant, making it easy to form consensus. Even if there is a gap, the form of the green line representing the medium-term investor cost baseline is either flat or upward. But not now! The current green and yellow lines are both in a downward trend, which means that mid-term investors who bought at high levels are constantly cutting their gains and leaving at low levels. The current market sentiment is not easy to form a bottom consensus. (Figure 2) As shown in Figure 2, we can see that the cost basis for the period from February to May 2022 (indicated by the blue dashed line) is very similar to what it is now. The green line shows a downward trend, and the three lines are spaced apart without any bonding. So shortly after the appearance of "Buy Point 2", there was a "selling point" signal, which led to the wear and tear of the principal. --------------------------------------------- In summary, let me also share my personal opinion: 1. If I am currently short, then I will definitely partially open my position when the signal appears. But the current comprehensive data performance is not very good, and I personally believe that the position should not exceed 50%. 2. A friend said, 'I am competing with the boss of Yilihua,' but it's not true! Institutions have strong financing capabilities and a lot of bullets, they only need to pursue vague correctness. And I don't have the strength, if I want to save bullets, I can only seek to narrow down the range. Although no one can guarantee buying at the lowest price, at least I need to be relatively accurate. 3. If you choose to enter here, be sure to bring a stop loss - when there are selling signals like in May 2022, you must follow the discipline of selling. 4. I am not extremely pessimistic. If it were, I would have liquidated my position long ago and would never have kept 40% of it even though I knew there was a downside risk. Firstly, subjectively speaking, I believe there is still a chance for a rebound; Secondly, I believe that BTC below fair value is undervalued; The current BTC/GOLD exchange rate has dropped from 41 to 15, while the lowest in the previous cycle was 9; With the frenzy of gold, this value should not be able to reproduce for long. At some point, capital will definitely rediscover the cost-effectiveness of BTC, and now it is only getting closer to that moment. The above is only for learning exchange and not for investment advice! --------------------------------------------- This article is sponsored by @ bitget | Bitget VIP， Lower rates and more generous benefits