Six years in the crypto trading world, starting with a few hundred thousand in early days, experiencing project zeroing out, and also feeling the thrill of hundredfold gains. The pitfalls I’ve stepped into and the waters I’ve navigated have all been summarized into a few trading rules — they’re not complicated technical indicators, but the signals in market trends that are most easily misread. Sharing these in hopes of helping you pay less tuition.

**A gradual decline after a market surge is often not a real downtrend**

When you see the price suddenly surge 20%, many get excited, only to start cutting losses and fleeing during a week of downward movement. But if you look closely at the order book, you’ll notice a detail: during the pullback, trading volume shrinks, yet key support levels remain solid. What does this combination indicate? The main force is shaking out weak hands, not trying to crash the price.

The purpose of a quick rise is to attract follow-on buying, while a slow decline is meant to shake out indecisive retail investors. If you understand this logic, you’ll see why the market is most panicked just before a rebound — that’s when you should hold tight.

**A slow recovery after a big drop is actually the most dangerous**

I’ve suffered big losses from this. When the price suddenly crashes 30%, it looks terrifying, but then it begins to climb back slowly. You think, “Now I can buy the dip,” but more and more retail investors follow in, and suddenly the big players launch a second wave of decline.

That’s exactly what happened with the LUNA market. Rapid drop → panic selling → slow rebound attracting bottom-fishers → another sharp decline. Many people get cut in the second wave, some even to zero. This kind of trend is the most deceptive because it looks like an opportunity on the surface, but in reality, it’s a classic dump scheme.

**Volume surges at new highs indicate market vitality**

When the price hits a new high, if the trading volume also increases, don’t worry. It shows that despite disagreements, funds are still battling, and the market is alive. The real danger is when the price consolidates at high levels with a sudden drop in volume — that indicates participants have already exited, and a big drop is imminent.

Volume is like the market’s breath. As long as it’s breathing, there’s hope; when it stops, this trend is basically at its peak.

**A sudden large bullish candle at the bottom of a bear market may be a smoke screen**

In a long-downtrend market, a sudden large volume bullish candle can easily give the illusion of a bottom. But if after this candle, volume drops again and the price consolidates at high levels, it’s likely a test by the main force, not a real start of a rally.

A true bottom should be confirmed by a large volume bullish candle followed by sustained high volume and continuous breakthroughs. One single bullish candle claiming the end of a bear market is a trick to lure retail investors in.

**Explosive rises of small coins are often liquidity traps**

A small coin jumps 50% in one day, doubles in two days, looking crazy. But if you look closely at the order book, you’ll find: the sell orders are extremely thin, and just a few retail buyers can push the price higher. This isn’t because the coin’s value has changed, but because of poor liquidity and manipulation. Once retail investors follow in, and selling pressure appears, the price will plummet vertically, and the market can’t catch up.

Why are major coins stable? Because they have deep liquidity, requiring large funds to move. The “explosive rise” of small coins is 99% a trap.

**Multiple tests at the bottom are more convincing than a single bullish candle**

The most reliable bottom signal isn’t a sudden violent rebound, but multiple tests of key support levels without breaking. One test might be a coincidence; three tests with support holding firmly indicate genuine buying interest at that level.

This kind of trend isn’t as exciting as a single big bullish candle, but risk management is clearer. You can build positions during each test that holds, and if support breaks, the stop-loss logic is straightforward.

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Six years in the crypto space, the biggest takeaway isn’t how much I’ve earned, but understanding a few basic market principles. The rise and fall of the market itself isn’t special; what’s special is how people interpret these movements. Learning to analyze volume, support levels, and tests to understand market intentions is more reliable than any indicator.

Mainstream coins like Bitcoin and Ethereum best exemplify these rules. Small coins, though easily manipulated, are subject to the same logic. Recognizing the market’s tricks isn’t for quick profits, but to survive longer.