"Jiangfeng Trading Strategy Diary" Issue 33

Recently, this round of market trends has indeed been very strong. The market is full of wailing, and I have suffered heavy losses as well. It has taken me several days to adjust my mindset, and I have stopped updating for a few days. Now, putting aside any emotions, I look at this round of market trends objectively. I do not deny the upward trend, but the cost-efficiency of chasing long positions at this moment is clearly not high, so I prefer to continue waiting for a rebound before making light positions in short orders!

BTC has quickly risen from over $60,000 to over $80,000, and ETH has also risen from around $1,900 to regain $2,500. Faced with such a market, many people's first reaction is: can we still continue chasing long positions?

My answer is: the trend is not confirmed to be over, but at this position, I am not willing to chase long positions.

It's not because I think BTC is about to drop, but because the positives behind this round of increase have already been quickly traded by the market. The higher the price goes, the lower the risk-to-reward ratio for continuing to chase long positions is becoming.

1. Why is this round of increase so strong?

This increase is not just a simple emotional speculation.

First, the U.S. Treasury has expanded its long-term U.S. debt buyback plan, and the market is re-trading the logic of "dollar purchasing power under pressure, liquidity improving." On August 19, the U.S. Treasury announced it would raise the scale of long-term national debt repurchases to at least $4 billion each time. After the announcement, the dollar weakened, and assets like BTC and gold clearly benefited.

Second, ETF funds are flowing back.

As of the week of August 21, the net inflow into U.S. spot BTC ETFs was about $1.92 billion, and ETH ETFs about $697 million; on August 24, the BTC ETF continued to see a net inflow of about $338 million, and ETH ETF about $116 million. This indicates that there is indeed real money participating in this round of increase, rather than simply driven by retail investor emotions.

Third, the improvement of regulatory expectations + short covering.

The further clarity on the U.S. crypto regulatory framework has improved market risk appetite, and after the price quickly broke through key resistance, a large number of shorts were forced to cover, further amplifying the increase.

So the core of this market trend can be summarized as: macro expectations improved + ETF funds flowing back + regulatory expectations + short covering.

This is also why I will not blindly short at the current position, but instead wait for further rebounds near the upper pressure levels before considering light positions in short orders.

2. However, I also will not blindly chase longs now.

Because the most dangerous time in the market is often not when there is no upward logic, but when everyone starts to understand why it should continue to rise. BTC has now broken through $80,000, the short-term increases have been significant, and market sentiment is also clearly warming up. However, there are still several variables in the market that cannot be ignored!

Can ETF funds continue to maintain their current strength? Will the dollar strengthen again? Will long-term yields on U.S. debt rise again? Can it truly stabilize above $80,000?

It is especially worth noting that the U.S. debt market itself has not completely eliminated risk. The yield on the 30-year U.S. debt is still at a high level recently, and concerns about inflation, fiscal deficits, and long-term financing costs still exist.

So the current logic is not "bearish factors have emerged," but rather that positive factors are being quickly realized, and new bearish variables are waiting to be validated, which is why I am unwilling to chase long positions around $79,000.

3. My thinking: I do not guess the top; I wait for the price to present opportunities in suitable positions before I consider participating.

If BTC continues to rise, I will not place heavy bets prematurely to gamble on the top just because I am bearish. On the contrary, I would prefer to see it continue to rise. Because for bears, the higher the price, the more trading value there is.

BTC: Focus on around $82,600; currently, BTC is about $79,360. There is about 4% room from here to $82,600.

So my plan is very simple: Around $79,000: do not chase shorts, do not chase longs. Instead, wait for the price to rebound again to $82,000-$82,600: focus on observation.

If BTC reaches near $82,600 and shows signs of a failed breakout, increased volume stagnation, or tops out divergence, or falls back to key support, then I will consider making light positions in short orders near $82,600.

The first target is $78,000. If $78,000 is effectively broken and fails to bounce back, then look at: $75,000-$72,000-$70,000.

But if BTC breaks through $82,600 and continues to increase in volume and stabilizes above, then the short plan will concede defeat.

ETH: $2,600 is just the first observation zone, the real focus is on $2,680-$2,695.

ETH is currently about $2,480. My thinking is also not to chase shorts now but to wait for a rebound.

First observation zone: around $2,600. If ETH climbs to around $2,600 and shows significant signs of a failed breakout, I will consider light positions for participation.

Second observation zone: around $2,680. If it breaks through $2,600 and continues to rise, I will not chase longs due to fear of missing out, but will continue to wait for higher positions.

Third observation zone: around $2,695. $2,680-$2,695 is the pressure zone I currently pay more attention to.

If ETH really reaches here and shows obvious signs of a failed breakout structure, then the odds for the bears will further improve.

My targets are: $2,400-$2,300-$2,200.

Similarly, if ETH strongly breaks through $2,700 and stabilizes, then I will also concede defeat and exit to prevent a false break; the stop-loss suggestion is set above $2,750. Recent fluctuations have been significant, so stop-loss adjustments are larger, so everyone should remember to keep positions light for speculation; short orders are also a risky endeavor!

I am not saying BTC at $80,000 is the top, nor that ETH at $2,600 is the top. The current market still has bullish momentum dominating. But trading does not mean that one must participate just because prices are rising.

If you are like me and did not buy the cheap chips at lower levels, do not chase in at high positions out of fear of missing out. Although this round of increase has fundamentals, capital, and sentiment, it is precisely because the positives have already been realized to some extent, and now at relatively high prices, I feel that this is not the time to blindly chase the rise, but rather wait for the market to continue pushing higher, bringing prices to better key resistance levels before taking light positions to speculate on shorts.

⚠️⚠️⚠️ This week's specific trading strategy is as follows:

My plan is very clear: BTC: Focus on observation near $82,600-$84,000; after confirming a failed breakout, take light positions in shorts, targets $78K-$75K-$72K-$70K. Stop-loss should be placed above $84,600.

ETH: First observation near $2,600, focus on $2,680-$2,695; after confirming a failed breakout, take light positions in shorts in batches, targets $2,400-$2,300-$2,200-$2,100; stop-loss should be placed above $2,750!

⚠️ Note: Be sure to bring stops when speculating; if you cannot handle wide stop-losses, reduce your positions. Short orders are still considered a risky endeavor; if you insist that the bull market has come, then please ignore this. If your thinking aligns with Jiangfeng's, believing that there will be a significant retracement, then remember to go light and take stops for speculation!

I would rather miss a part of an increase than disrupt my trading rhythm to chase the last segment of the market.

The market will never have only one opportunity; what really matters is: when opportunities arise, you still have enough capital and patience.

The above is just my personal market analysis and trading thoughts, not investment advice. Please rationally control positions and risks.

Note that there may be deviation in the above entry and exit points: Bitcoin ±100 points deviation, Ethereum ±5 points deviation!

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