Source: Talking about Li and other things
Today (May 22), the price of Bitcoin broke through $110,000, setting a new historical high, as shown in the figure below.
Looking back now, over the past six months or so, the price of Bitcoin has risen and fallen, and once again wiped out the positions of many people. Although the price has now risen to a historical high of $110,000, people's sentiment does not seem to be as excited as it was at the beginning.
Looking back over the past six months, my holdings have not changed at all. The only change is that the balance in my wallet (denominated in U) has been fluctuating. However, according to the original plan, because Bitcoin has reached the second target position set earlier today, before publishing this article, I personally chose to sell 10% of my positions again. The last time I reduced my position was on December 5 last year (2024), when the price of Bitcoin exceeded $100,000 for the first time. I remember that I also posted an article as a souvenir, as shown in the figure below.
I have basically not done any transactions in the past six months. I have focused most of my spare time and energy on writing for self-media. From the beginning of the year to now, I have made nearly 300,000 words of notes, of which about 180,000 words have been sorted and edited and output in the form of articles (pictures and texts) through the Huali Huawai public account, with an average of about 1,200 words shared every day.
However, compared with last year (2024), when I output an average of 2,000+ words per day, the amount of content has been almost reduced by half. Perhaps my sharing will be further reduced in the future. In fact, I can still continue to share every week, more because it has become a habit (habitual persistence). Now I don’t care too much about issues such as private domain traffic or public domain traffic.
Of course, this habit has brought me both good and bad results. The good thing is that Hualihuawai has received a lot of messages of recognition. The bad thing is that I have also received some targeted messages and comments. Fortunately, I am a relatively Buddhist person and I don’t care about other people’s evaluations or judgments of the right or wrong of what I have said (written), because some right and wrong may take longer to verify.
But then again, even if it is right or wrong in the end, what does it matter? Different people may have different perspectives on the problem, so the results may be different. Although I also hope that every partner who has read Huali Huawai's articles can gain something in the field of encryption, my personal opinions, ideas and strategies, whether right or wrong, can only be responsible for my own results (positions) in the end.
1.Why do many people still not make money?
A few days ago, someone left me a message in the background and asked me an interesting question: Bitcoin has risen to 100,000 again, but why do many people around me still not make money?
This question may need to be considered on a case-by-case basis:
On the one hand, it may be because everyone has different subjective observations and feelings. For example, when this partner joins some group chats or talks with some friends around him, he finds that many people say they have not made any money.
On the other hand, we can directly observe from the side through some on-chain indicators. For example, the Bitcoin Indicator Template Table we compiled earlier contains a Percent Supply in Profit (Proportion of Supply in Profit). This indicator can be used to measure the proportion of Bitcoin currently in circulation that was bought at a price lower than the current price (that is, the holders of these coins are in a profitable state on paper). As shown in the figure below.
From the above chart, we can see that the current value of this indicator has once again exceeded 90% (reaching 99%), which means that most Bitcoin holders are currently in a profitable state. But at the same time, the optimism shown by the market may also indicate that we are once again in the top area of a stage (note that it is a stage, not a long-term) period. As for how long this stage range can last, I don’t know, maybe a few weeks, maybe 1-2 months.
Of course, this Percent Supply in Profit is only one indicator dimension. If necessary, you can continue to use other indicators such as MVRV (market value to realized market value ratio), SOPR (realized profit margin), Long-Term Holder / Short-Term Holder Supply... for comprehensive assistance and evaluation in more dimensions.
In short, Bitcoin has risen to 100,000 again, but why do many people around me still not make money? This question may require specific analysis of specific issues. For example, it is necessary to consider each person's entry time, position ratio, position currency, holding cost, etc.
Although theoretically, under a basically certain trend, many people should be able to make money, the game between the market and human nature has always existed. I remember that we mentioned earlier that in this field, 99% of people may not make money or even lose money in the end. Those who can earn millions of dollars a year are actually rare, perhaps less than 0.1%.
For example, let's continue to take Bitcoin as an example. In this cycle, it has risen from around $15,000 to the current $110,000, which is almost a 7-fold increase, but the proportion of people who can really get big profits from it seems to be small. From our perspective, the core reason for this problem is: not establishing and adhering to your own trading rules (or trading system).
In the whole year of last year (2024), we sorted out a lot of methodological content through Huali Huawai, and most of the content has been compiled into the e-book "Blockchain Methodology". There are two main purposes for doing this: First, as a kind of learning, thinking and recording from my personal perspective, it serves myself. Second, it is shared by the way, and I also hope that partners in need can find the points that suit them and draw inferences from them to establish their own set of trading rules.
But after rounds of bull markets, we find that there are not many people who can really endure long-term loneliness and always maintain concentration and patience. This also reminds me of the classic line in "See You Tomorrow": "I have heard a lot of truths, but I still can't live a good life."
But I can understand this very well, after all, I have been through this all the way, and I am still thinking about some of the truths. One of the main reasons why I have been writing and taking notes in recent years is that I hope I can always stay focused and think calmly, instead of spending all my time watching the market and trading frequently.
Living in this society, what we can discover the most is actually truth, such as various truths of life, principles of getting along with people, principles of investing and making money... and so on. But most of the truths, for many people, just sound reasonable. They will not really change the trajectory of their life directly because they have heard/understood certain truths, because some principles need to be put into practice. Even if you have heard and understood the truths, but have not put them into practice, you do not really understand them.
It’s like many parents always teach their children that they must study hard, otherwise they will suffer in the future. However, this truth is only based on what the children hear (or understand). If you use the vacation time to send your children to remote rural areas to farm or to construction sites to experience life, then it won’t take long for the children to truly understand.
From an investment perspective, this seems to confirm the saying: the experience of making money is often gained through losses. It is difficult to teach directly. People cannot learn by teaching, but they can learn by doing. After entering the crypto field, many people basically lose money in the first bull market cycle, the second bull market cycle is mainly used to recover the investment, and the third bull market cycle may make real money.
2. What mentality should we maintain when facing the upcoming market?
1) Continue to stay focused
There will be no shortage of opportunities to make money in this market. The key is that we need to find the most suitable way for ourselves from various opportunities.
It is impossible for a person to seize every market opportunity. If you always chase after various hot spots in the market, always want to seize all opportunities and always change your plans due to FOMO, then the final outcome may be a loss.
There is a saying that goes: If you chase two rabbits at the same time, you will catch neither.
Therefore, we need to always maintain self-discipline, focus only on the 1-3 sub-sectors that we are most interested in and most optimistic about, and focus on projects with fundamentals and narrative prospects for a long time. Only those who can endure 99% of garbage time will have the opportunity to enjoy the 1% of highlight moments.
2) Protect existing profits
In previous articles, we have mentioned several times that it is more important to maintain existing profits than to earn more risk-return, especially during a bull market.
If you only invest in Bitcoin, it’s okay, because Bitcoin is not afraid of being trapped. As long as you are not in a hurry to use the money and have enough patience, even if there is a temporary loss in trading Bitcoin, you will most likely be able to recover your investment and make money over time. Just like the friend who was trapped at the top of the mountain with $100,000 last year, if he had persisted until today, wouldn’t he have successfully untied it now!
But as for Altcoin, unless you are persistent enough and are willing to make long-term bets with funds that are willing to lose money, you should not get deeper and deeper into one or several altcoin projects.
From my personal experience, although it is relatively difficult to play the copycat game in this cycle, many people have actually gained something from it. For example, I heard that some friends in the group got 5-10 times the profit from a copycat game last year, but because they continued to fantasize about getting 20 times or even 50 times the profit, they insisted on holding on to it and did not sell it. In the end, not only did they lose all the profits, but they have even lost some of their principal.
Sometimes the cottage market rises fast, but it falls even faster. When it rises, you seem to feel like a big shot, but once it falls, you will be so low that you are not even a grandson. Here we still say the same old saying: in the cottage investment plan, you must maintain liquidity, protect the principal, do not touch if you do not understand, buy in batches, and sell in batches. If you cannot grasp the long-term direction, then in the short-term operation, just strictly do the stop profit and stop loss.
3) Use your time wisely
The crypto market is traded 24/7, but we cannot stay awake 24/7. Therefore, we need to plan and use our time properly. At the same time, we should try to maintain good health and not stay up late or overdraw our physical strength just to watch the market.
Especially in terms of trading, there are actually many tools that can be used to assist your own operations. For example, you can use some robots to complete trading plans, use some alarm tools to remind yourself of key market fluctuations, or you can use the simplest way of placing orders to trade, etc. When you slowly change from 10 transactions a day to 1 transaction a day, and then to 1 transaction a week... you may find that your mind and thoughts will become clearer and clearer.
As for learning, it depends on personal preference. There is a huge amount of information on the Internet, and there is also a lot of spam. Different bloggers often have different views and content styles. You just need to choose those bloggers or content that you are interested in to follow or view.
In addition, you can also use some existing on-chain tools to more intuitively understand and discover some of the dimensional data you need, which will also help you optimize your time and energy. We have already sorted out a lot of on-chain data indicators in our previous articles, so I will not repeat them here. Interested partners can search back to read the historical articles of Huali Huawai.
Of course, the rational use of time is to make better transactions and learning, but trading is not just about buying and selling, and learning is not just about watching or reading. If you can record your feelings and summaries in the form of notes (diaries or weekly journals), as long as you persist, I believe you will gain more.
At the end of the article, let’s briefly review some of the viewpoints in Hualihuawai’s past articles in the past two months (March 22nd to May 22nd):
March 24 article : As for when a new trend change or phased reversal will occur, I don’t know. Here I can make another blind guess. If the market continues to usher in new black swans, perhaps we will see Bitcoin starting with 7 again (new opportunities for investors to increase their positions), and if the market continues to climb slowly at the current pace (in recent weeks), then perhaps we will also see some new phased opportunities in the second quarter of this year (new selling opportunities for speculators).
March 26 article : Because of the uncertainty in the market, some new opportunities are created. Everyone knows that the sun will definitely rise from the east tomorrow, so there will be no opportunity to make money (no one will bet on which direction the sun will rise tomorrow). But if I tell you (this is just an example and assumption) that there is a 75% probability that Bitcoin will see a price starting with 9 in the next few weeks, and a 25% probability that it will continue to see a price starting with 7, then there will actually be certain opportunities. In such an uncertain situation, what will you do? Trading is not luck, but a discipline and system. Think about what your ultimate goal is, then stick to it, and never risk any loss that exceeds what you can afford to make any trade.
March 28 article : As for whether the Pendle coin can still be bought now, I cannot provide specific buying and selling advice (no specific buying and selling guidance at the transaction level). If you have the urge to participate in the Pendle transaction, then one of the simplest ways is to refer to the ideas in our article last year (November 12, 2024) to do some necessary research and then decide whether to participate. In that article, we took AAVE as an example and listed several simple ideas and methods for quickly selecting projects.
March 31 article : The market is cruel and the fluctuations are ruthless. Only those who are prepared in advance in the silence of the market and those who can remain calm when most people collapse can get the results they want in the new chaos. A person's return on investment is often determined by his trading discipline and personal mentality.
Article on April 1 : On March 24, 2025, Global M2 reached a stage peak of 109 trillion US dollars. If there is no new and larger black swan event, BTC may rebound to a stage high in June 2025. As ordinary investors, we seem to be unable to change the overall situation. The only thing we can change is our own position (protect our position and wait patiently for new opportunities to make money).
Article on April 5 : It is not important for you to know whether it is a bear market or a bull market as defined by others. It is not very meaningful for you to verify such issues everywhere. The key is how you view the bull market or the bear market. We believe that it is not a real bear market at this stage, or it can be described as a phased bear market (or a large-scale correction). If we continue to look at it over a longer period of time, it is highly likely that Bitcoin will continue to break new highs in the future. It depends on whether you can wait until then. It is not easy to be patient, but I think this is what is most needed now.
Article on April 7 : If you don’t know what to do, then the best thing to do under the current drastic fluctuations is to do nothing. If you still have spare positions for long-term investment, and these funds will not affect your real life, then the next decline is still an opportunity for you to increase your position (reserve) of Bitcoin in batches. In other words, as an ordinary investor, it is still a relatively safe and relatively simple operation strategy to honestly use the core position to continue to hoard more Bitcoin on dips.
April 10 article : Although many people say that it is a full-scale bear market, no matter what others think, as far as Bitcoin is concerned, from a longer-term perspective, we still think it is bullish, and the current position of $76,000 seems to be a good support. Whether it is the current $82,000 Bitcoin, or it may continue to fall to the beginning of 7 or even 6, you can still consider accumulating in batches in the current oscillation range.
Article on April 14 : Market cycles are actually reincarnations again and again. Sometimes bubbles will grow bigger and then shrink repeatedly, and sometimes bubbles will burst directly and then blow out again... Although each cycle will be different (such as different time lengths, different policy impacts, different narrative stories, etc.), as long as we understand the basic relationship between the market and liquidity, such as understanding the relationship between policies, inflation, and money printing, then we can always find some similarities in the market, which is what we can magnify and utilize.
Article on April 18 : We can choose to buy only gold, or only Bitcoin, or both gold and Bitcoin as long-term reserves. This is determined by your personal preferences, position allocation and risk management. Short-term investment depends on technology (the ability to grasp indicators, the ability to screen information, the ability to analyze data, etc.), and long-term investment depends on mentality (investment logic, grasp of cyclical trends, values, etc.). If you can only see the present, but do not have good technology as a trading support, for example, if you see that a target has risen or become popular, you will directly abandon the existing target to chase high or hot spots. With such a repeated investment mentality, the final result may be nothing.
Article on April 24 : When Bitcoin reaches a certain high proportion (for example, around 65%), it often means that a new round of altcoin season may be coming. However, in the current overall market environment, if you want to continue to seize possible altcoin opportunities, then it is best to give priority to paying attention to mainstream coins (such as SOL, ETH, or leading coins in other sectors). At the same time, you must control your position ratio and do not let yourself fall into a new quagmire in the matter of Altcoin(especially on-chain meme).
May 1 article : If there is no new black swan event, we may really be able to see Bitcoin break through the historical high in the second quarter of this year. Theoretically speaking, even if Bitcoin has the opportunity to continue to break through the new high in the second quarter of this year (May and June), it may not rise too much. We believe that it is likely to continue to maintain a new high range and enter a period of volatile market, unless there are relatively large new positive driving stimuli in policy factors or macro data (mainly in the United States). Try to ignore short-term prices and put the time cycle longer. Under the premise of not affecting the quality of your daily life, try to hoard more Bitcoin, even if it is only hoarding 1 Bitcoin, which may become one of your most important personal wealth in the future.
May 8 article : At this stage, the rise of Bitcoin is still driven by news (news) and is mainly based on institutional hedging speculation. This may cause a so-called short squeeze, that is, the previously over-leveraged short positions may be liquidated by the market, and then push Bitcoin back to $100,000 or even higher. But whether the price increase caused by this method is sustainable, or how long it can last, this may require us to raise a new question mark. The core and underlying logic of the market is still liquidity. In the absence of a fundamental change in liquidity itself, the rapid rise in prices is both an opportunity and a risk in the short term.
May 12 article : Bitcoin price seems to be back in place, and it seems that it is only a matter of time before it breaks the all-time high again. Ethereum price has also seen a short-term violent rise, and some Altcoin seem to be ready to move. However, in terms of macro factors, there are still some uncertainties. Therefore, we believe that the current market is still a bull market for Bitcoin, and it seems that the market motivation for short-term speculation is greater. The more this time, the more we should continue to be rational, not be affected by the current optimistic price sentiment, not chase high and full All In at will, and control our position ratio, for example, how much position ratio is used for BTC allocation, how much ratio is used for ETH allocation, how much ratio is used for blue chip altcoin allocation (such as BNB, SOL, PENDLE, LINK, AAVE, etc.), how much ratio needs to continue to maintain liquidity (USDC/USDT), how much ratio is expected to be used for speculation in currencies with poor liquidity or low market value... These all need to be reasonably planned according to personal risk preferences.
That’s all for today. The sources of the images/data cited in the text have been added to Notion. The above content is only personal opinion and analysis, and is only for learning records and communication purposes, and does not constitute any investment advice.
