introduction
Today, Bitcoin briefly fell below $89,000, reaching a low of $88,200. Ethereum and SOL also fell below $2,400 and $135, respectively. Even within an hour of the plunge, the total amount of liquidation on the entire network reached $454 million.
In such an extreme market, investors' emotions and decisions become crucial. The words and deeds of KOLs (key opinion leaders) with large fan bases on social media often affect the market trend invisibly. In today's plunge, these KOLs reacted differently. Some released in-depth analysis of the market at this time and put forward bearish views; some expressed a patient attitude; and some chose to protect funds through decisive stop-loss strategies. These different voices and strategies reflect the different ideas of KOLs in the face of drastic market fluctuations, and also provide different references for investors.
Escape type
At the peak of the market, being able to accurately judge the peak and sell in time to avoid subsequent losses is almost every investor's dream. Through keen observation and in-depth analysis of market data, some KOLs have successfully achieved this, accurately identified signs of overheating in the market, and made corresponding decisions.
For example, Mr. Beggar (@market_beggar) issued a warning as early as January 13 through on-chain data such as "Realized Profit", AVIV heat map, Cointime price deviation and other indicators, indicating that the market is already overheated. His core point is that the top of the market usually goes through two obvious "distribution" stages. In each bull market, a large number of investors will quietly accumulate chips at low levels, and the distribution of these chips is a signal that the bull market is gradually coming to an end. When market sentiment reaches its extreme and participants generally hold higher-cost chips, once prices can no longer continue to rise, selling will gradually emerge, eventually triggering a price drop and forming the beginning of a bear market.
Two rounds of "distribution" signals
Mr. Berg pointed out through the on-chain data model that before each bull market peaks, there will be two rounds of distribution signals. The first round of distribution occurs in the early stage of the market. When prices rise, a large number of low-cost chips begin to flow into the market. As prices fall back, market sentiment gradually recovers, and bargain-hunting funds enter, pushing the market into the second round of distribution. At this time, a large number of "high-priced buyers" begin to be under pressure. If prices fail to continue to rise or begin to fluctuate, these high-cost holders will increase selling pressure and further trigger a decline.
How to identify a top signal?
Mr. Berg's top judgment model is dynamically modified through multiple on-chain data, including indicators such as Realized Profit, AVIV Heatmap and Cointime Price Deviation.
- Realized Profit: When the market price broke through 70k, there was an obvious profit-taking signal, which marked the beginning of the first round of distribution. As the price broke through $100,000, the second round of distribution appeared again, and more selling pressure began to appear in the market.
- AVIV Heatmap: This heat map can help us see whether the market is in an overheated stage. When the market rose to its peak, the AVIV indicator showed signs of overheating, and this phenomenon appeared again when it broke through $100,000, which means that the pressure for the second round of distribution has accumulated.
- Cointime Price Deviation: Mr. Berg used this model to track historical tops and found that each cyclical top is accompanied by two obvious peaks. The current market is also in the second peak stage and has shown signs of turning.
Similarly, Calm, Calm, and Calm Again (@hexiecs) made a similar judgment on January 20. He pointed out that Trump's wife's issuance of cryptocurrencies was an obvious signal of a local market top, so he decisively liquidated his position, sold 90% of BTC, and exited the TRUMP position. Looking back on this decision, he said that if this signal had not appeared, he might not have made such a decisive decision. He also mentioned that despite trying to obtain higher returns through on-chain operations, in a market environment with exhausted liquidity, fast PVP (player-to-player) transactions almost left old players with no way out.
Arthur Hayes also expressed similar views in recent articles and tweets. He believes that since the US political environment has not changed fundamentally due to Trump's election, cryptocurrency prices may pull back to the level of the fourth quarter of 2024. He pointed out that many IBIT holders are actually arbitrage funds, who make profits by going long on ETFs and shorting CME futures, but once the price of BTC falls, they will sell IBIT and buy back CME futures, which may push the price of BTC further down, even to $70,000. Arthur Hayes believes that only the Federal Reserve, the US Treasury, or other countries can effectively improve the current market conditions through some form of monetary easing.
Through in-depth analysis of the market and keen insight into the macro environment, these KOLs successfully avoided the top risks of the market and provided investors with important signals about market changes.
Meat cutting type
When the market falls, timely stop loss is the key strategy to protect the principal. Although stop loss often means short-term losses, being able to decisively execute this operation and avoid greater risks can often effectively reduce losses and show the investor's ability to remain calm in turmoil.
Setting 10 big goals first is a typical example. When the market went down, he quickly closed his long orders, even though he lost hundreds of millions of dollars. It is worth noting that he had set a clear stop loss line several days ago, and once the market hit the line, he would immediately close the position. This strict risk management method reflects his high attention to trading discipline. He mentioned on social media that although stop loss brought immediate losses, he believed that admitting failure and stopping loss in time was the only way to protect capital and avoid greater losses. The most dangerous thing in the market is not failure, but ignoring the signs of failure and having a fluke mentality, which ultimately leads to more serious losses.
In his analysis, he emphasized a core principle in trading: quick response and decisiveness. In the face of drastic market fluctuations, only by responding calmly and adjusting strategies quickly can risks be avoided to the greatest extent. This calm decision-making ability also stems from a deep understanding of market trends and self-awareness.
Calm
Amid the turbulent market, some KOLs choose to remain calm. They usually look further ahead and believe that short-term fluctuations are just normal phenomena in the market cycle and there is no need to overreact. For these KOLs, patience and determination are the keys to success, and they are often able to maintain clear judgment amid the market noise.
Raoul Pal reminded everyone in a recent tweet: "You need to learn to be patient... It's like in 2017, Bitcoin experienced five pullbacks, each of which was more than 28%. Most of the pullbacks lasted 2 to 3 months before the market reached new highs. What many people worry about is just noise." By reviewing historical trends, he told investors that market pullbacks are normal, there is no need to panic, and it is wise to wait patiently.
Kevin Svenson also shared a similar view. He pointed out that although the current market sentiment tends to be panic, Bitcoin's trading volume has continued to decline since November last year. He believes that this shows that the market may be close to bottoming out, and the next wave of volume breakthrough is likely to occur during the rebound. "The current panic has made people ignore an important signal-the trading volume has not increased as the price falls, which means that the selling pressure in the market may have peaked."
Ansem also believes that although Bitcoin has currently fallen below the stop-loss support level and broken through the high time frame trading range, there is still no obvious bearish range breakthrough, so he believes that this round of decline may be just part of the market adjustment, and the overall trend remains unchanged. His analysis is more cautious, but he also mentioned that if the stock market also falls in the next few weeks, it is likely to mean that the market's risk aversion sentiment is spreading, which may lead to a larger market downturn.
Finally, CZ (Changpeng Zhao) retweeted a tweet, emphasizing the necessity of long-term investment. The tweet mentioned: "On the same day last year, the price of Bitcoin was $54,000, Ethereum was $3,178, BNB was $401, and SOL was $109. Now, all of these currencies have risen, and three of them have recently hit record highs. Short-term vision often makes us only see price fluctuations, but if we take a longer-term perspective, we can see more opportunities." CZ used this to remind investors not to be bothered by short-term price fluctuations, but to look at the market with a broader perspective and seize long-term investment opportunities.
summary
Under extreme market conditions, KOLs reacted differently, but whether they successfully escaped the top, decisively cut their losses, or remained calm, their decisions all reflected their deep understanding and unique judgment of the market. KOLs who escaped the top avoided market risks through precise data analysis, KOLs who decisively cut their losses protected their principal through stop-loss, and KOLs who remained calm stabilized their investment rhythm with patience and a long-term perspective.
For ordinary investors, the most important thing is to stay vigilant at all times and avoid blindly following the trend due to short-term fluctuations. The drastic fluctuations in the market may make us make emotional decisions, but in any case, staying calm, rational, setting a stop loss line and strictly enforcing it are the keys to avoiding greater losses. If you encounter extreme situations such as a margin call, you should also stop trading immediately to avoid further losses due to impulse. The market outlook is full of uncertainty, and any investment decision needs to be more cautious. Do not overreact to short-term fluctuations. Only in a calm state can you make a decision that truly meets your risk tolerance.
