The Great Wisdom Principle - On the Recent Price Fluctuations of BTC

Author: Liu Jiaolian

Unconsciously, BTC (Bitcoin) quickly completed a V-shaped reversal: from the low opening of 56.8k on May 2, it rose for three consecutive days and returned to the 64k line, which has exceeded the opening price of 63k on April 30. The reason for the reversal is introduced in the 5.3 Jiaolian internal reference "US employment data is a surprise, BTC has risen sharply above 60,000 dollars".

In today's world, BTC's V-shaped reversal is still the mildest. BTC's reversal is just the most abstract manifestation of the dramatic "boomerang" flying around in this world.

April 30 was the first day of the listing of the Hong Kong spot BTC and ETH ETF. The shorts did not give face and smashed it for two consecutive days, from the highest 64.7k to the lowest 56.5k. On May 1, Jiaolian published an article titled "Man Shang", which is the 22nd empirical record of the "Ten-Year Agreement". The transaction price of adding positions on a decline is $57,824. Thanks to the smart shorts, they gave such a discount. Discounts are fleeting, and only by adding positions on a decline can you grasp them.

In the entire human society, smartness is everywhere. I drove my kids out to play during the short holiday these few days. When I encountered a traffic jam, the kids discussed whether it was faster to take the main road or the auxiliary road. Each of them insisted on his own opinion and argued endlessly.

I told them that there is a "smartness principle", do you know? This theory tells a simple truth: what we lack most in this world is smartness. They will rack their brains to drive their cars on the fastest road, and the final result is that several routes are similar. For example, if the secondary road is significantly more unobstructed than the main road, then the smart people will drive on it, thereby diverting the more congested main road and aggravating the congestion of the secondary roads until the main road and the secondary roads are equally congested. So, it seems that actively choosing a faster route will increase speed, but in fact, it may not be faster no matter how you go, or it may be the same speed. And sticking to the established route without wavering will at least save effort and be safer.

The child seemed to understand: Is it to use stillness to control braking?

I agree. To further explain, another example was given: In many occasions where you need to queue, if there are multiple service windows, then the smart people will actively choose the shortest or fastest queue, so that we only need to quietly queue up in the current queue, because the length or speed of all the queues is flattened when the smart people jump left and right. For example, there are two windows now, and two rows of queues are formed. You are in the middle of the queue of the first window. At this time, a third window suddenly opened. Do you want to go over? In fact, when others change, naturally the number of people in front of you will decrease. Without moving your feet, you can enjoy the "bonus" of the new window. This is to use static to control dynamics.

Then it is extended to investment. I said: the investment market is the same. The market is full of smart people who jump up and down and chase hot spots. Originally, they had a full position of A, but when they saw that B was rising, they quickly cleared A and went all in on B. They thought they were smart and frequently changed positions, but in the end they might end up with nothing. It is better to hold on once you have determined it.

The same applies to trading in waves and adding leverage. There are too many smart people. In rounds of bull and bear cycles, they are all complacent, selling high and buying low, and going long and short. But if you only look at the last two cycles, you will know that almost all of the smart people have become cannon fodder. Between ups and downs, positions are wiped out.

The smart people work very hard, but in the end they are just "working" for the BTC HODLers who are determined to hoard and hold on to their coins.