What should be done during significant market fluctuations? Is there still hope for the market ahead?

Source: Talking Outside the Lines

I remember in the article on New Year's Eve, we optimistically stated: we continue to be bullish on the overall performance of the crypto market in the first quarter of this year. If no black swan events occur, we might see a good market in February, and possibly Bitcoin reaching 110,000.

However, the reality is that we are facing Trump's tariff policies, a $1.5 billion hacking incident, the Argentine president's LIBRA token event… which has triggered a large-scale liquidation in the market. This further confirms what we often say: the market is unpredictable, we cannot control the market, the only thing we can control is our own positions.

Looking back at the FTX collapse in November 2022, the fear and greed index was only around 20 at that time, while the recent liquidation caused the fear and greed index to drop to 10, the lowest level since the bear market of 2022, with people's emotions turning to extreme panic at an astonishing speed. As shown in the figure below.

However, for those who manage their positions well, encountering such market conditions can also be a good opportunity, as the occurrence of such extreme market conditions seems to indicate that we may have approached a local bottom of the phase.

1. What should you do during large market fluctuations?

At this stage, we may need to pay more attention to factors such as policies and capital flows. For example:

• Trump's tariff policies

If the Trump administration continues to announce new tariff policies in the coming weeks, it may continue to put short-term pressure on the market.

• ETF inflow/outflow data

If the situation remains unclear, there may be continued outflows, which would further negatively impact market sentiment. If inflows start to occur again, it could be a relatively good short-term signal.

In terms of specific position management, we can take this opportunity to make some new optimizations. For example:

1) Continue to optimize your portfolio

If you are not a short-term trading expert, then continue to hold your Bitcoin and do not easily give up your chips. At the same time, you can take necessary profits based on your holding cost and target (the old saying: buy in batches, sell in batches).

If your risk tolerance is relatively low, you can continue to reduce your altcoin holdings, especially those without any bullish catalysts and weak rebounds. You should strictly follow your risk preferences for stop-loss or take-profit operations, and do not hold onto losing positions. Of course, if you have already strictly taken profits and are optimistic about a particular altcoin you bought, then you can continue to hold those altcoins.

If your risk tolerance is relatively high and you still enjoy researching and buying altcoins, then focus on those relatively strong altcoins. For example, if BTC is falling, it doesn't fall or only falls slightly, and it rebounds first after BTC stops falling—these are relatively strong altcoins. Try not to buy those that have fallen significantly and you feel have hit the bottom or are very cheap. Even if you are speculating, do not bet on weak projects, and think carefully about your reasons for buying. The simplest idea is that if you cannot quickly list three reasons for buying it within 10 minutes, then do not buy it.

Also, continue to keep a certain amount of liquid funds (USDT/USDC) to deal with potential new black swan events.

2) Continue to learn

Reduce the time spent staring at the market and consider doing things you wanted to do before but didn't have the energy for, or things you are interested in. Staring at the market does not bring direct results; just set up some necessary monitoring alerts. If staring at the K-line could move the market with your thoughts, I would definitely stay awake 24 hours a day to watch it.

Alternatively, you can consider continuously utilizing your existing funds through various means. For example, you can pursue better investment returns with idle funds (if participating in on-chain stablecoin investments, be mindful of project risks; if participating in exchange stablecoin investments, pay attention to lock-up periods and do not lock your assets), as shown in the figure below.

Additionally, you can use tools like Rootdata to find and research potential airdrop projects, engage in arbitrage operations using funding rates, etc. In short, use methods you like or understand to keep your investment portfolio growing continuously. Sometimes, small amounts of money are still money; do not always fantasize about making $1 million overnight and look down on various $1,000 opportunities.

Moreover, it is not only in a bull market that one can make money. In fact, if we ignore the concepts of bull and bear markets, there are always various opportunities to make money in the market; it is just a matter of whether you can discover, understand, execute well, and generate better returns.

2. Is there still hope for the market ahead?

In a previous article, we mentioned: I remain optimistic about the overall trend of the market moving forward. If no larger-scale black swan events occur, I believe that after some consolidation and correction, if we can also see new recovery driving factors in narrative, economy, or policy, then the market may still have some new opportunities ahead.

Of course, the opportunities mentioned here do not mean that you will see a big bullish trend tomorrow and achieve financial freedom the day after. In an unpredictable economic market, we should think about some forward-looking aspects, ideally abandoning the fantasy of getting rich quickly and adopting a longer-term perspective on investments.

At this stage, if the so-called bull market wants to continue, it needs to create new catalytic events to attract more new buyers. The possible events we can see now (that are relatively important) include:

- U.S. Bitcoin National Strategic Reserve

However, this matter has already been hyped for quite some time, and part of the expectations may have already been reflected in past prices.

For now, we just need to pay attention to the progress of this event. Although it remains a very significant catalyst for the market, its impact is mainly long-term. Moreover, before this matter is finalized, Bitcoin's price will likely continue to fluctuate for a long time until the U.S. has acquired enough chips to truly implement it.

The White House will hold its first cryptocurrency summit on March 7, and we can pay attention to whether the strategic reserve will be mentioned.

- Federal Reserve interest rate cuts, crypto regulatory policies

If you usually pay attention to market dynamics, you will frequently see the FED (Federal Reserve) and SEC (Securities and Exchange Commission) because their every move has a significant impact on the market.

In fact, since last year, the market has been focused on expectations related to interest rate cuts. However, to be honest, at this stage, the crypto market itself is just a small market. We may absorb liquidity from the stock and other financial markets due to interest rate cuts, but do not expect liquidity to prioritize flowing into the crypto market.

I see some KOLs online claiming that the crypto market will become the largest reservoir for the U.S. dollar. Personally, I think this statement, at least at this stage, seems a bit delusional. Rather, the crypto market will absorb a portion of the liquidity overflow from the U.S. dollar, and in the future, U.S. Treasuries, U.S. stocks, and crypto will collectively serve as reservoirs. Currently, the total market value of U.S. Treasuries is about $32 trillion, U.S. stocks about $60 trillion, and crypto about $2.8 trillion.

Moreover, the so-called market value of the crypto market currently is merely an exuberant manifestation under "policy ambiguity." Once countries like the U.S. clarify some regulations and laws regarding the crypto market through various policies, and at least 90% of junk projects go to zero or shut down, then the market value of the crypto market may truly reflect its value.

However, "policy ambiguity" has precisely been the opportunity for the crypto market over the past decade. The crypto market has grown from a $3 billion market value in March 2015 to a $2.8 trillion market value in March 2025, with Bitcoin rising from under $500 in 2015 to nearly $110,000 at its peak. Countless wealth-making opportunities have emerged during this process (of course, accompanied by numerous losses in the dark forest).

With the continuous development of the crypto market and the deepening participation of institutions, as well as the follow-up of various relevant regulations or policies, the opportunities and imagination space left for ordinary people in the future crypto market will only become smaller. However, if we continue to ignore short-term and medium-term fluctuations, from a longer-term perspective, the crypto industry is still in a rapidly upward development phase.

Until now, I can still see many people saying that the crypto industry is a scam, Bitcoin is a tulip… Anyway, how others say it is their freedom, and I will not pay attention to or refute such statements, as long as we believe that the future of this industry is still bright.

3. Finally, let's take a look at some recent noteworthy or interesting events:

- Bybit hacker money laundering march

Reports indicate that the Bybit hacker (a North Korean hacking organization) has successfully laundered more than half of the stolen ETH into BTC using ThorChain. The hacker transferred at least 161,490 ETH to ThorChain through 3,934 different bridging transactions, utilizing a large number of blockchain tools for jumping, including Asgardex, DeFiSwap, FortunaSwap, GemWallet, LiFi, ShapeShift, TrustWallet, etc.

Due to the hacker's money laundering, ThorChain's trading volume set a record for the highest single-day volume last week. Perhaps because the situation seems serious or due to ThorChain's inaction in this matter (the community's opinions are mixed, with some criticizing ThorChain for inaction while others support ThorChain's complete decentralization approach), on February 28, THORChain's anonymous core developer Pluto announced his exit from the project, as shown in the figure below.

- SOL ETF may be approved?

On February 28, CME (Chicago Mercantile Exchange) announced that it would launch SOL futures on March 17, offering micro contracts (25 SOL) and large contracts (500 SOL). As shown in the figure below.

Based on previous experiences with BTC ETF and ETH ETF, SOL futures may be paving the way for the approval of SOL ETF.

- Base chain to become the fastest EVM chain?

On February 28, Base announced that it would launch Flashblocks on the mainnet in the second quarter (this technology is developed by Flashbots and is implemented through partial blocks published by block builders, currently live on Base Sepolia testnet). This upgrade will reduce the effective block time from 2 seconds to 200 milliseconds, making Base the fastest EVM chain to date. As shown in the figure below.

- SEC says MemeCoin is not a security!

On February 27, the SEC stated in a recent announcement that the issuance and sale of MemeCoin may not be subject to federal securities laws, and MemeCoin is generally not a security but more like a collectible. However, they also warned that not all MemeCoins are exempt from securities laws, and there is still a risk of fraud associated with MemeCoins. As shown in the figure below.

Is the SEC trying to say: the president's token is legal for harvesting the retail investors, equivalent to the retail investors voluntarily buying a collectible, but those MemeCoins competing with the president's token may be illegal and fraudulent, haha.

- SEC withdraws lawsuit against Consensys

On February 27, the SEC withdrew its lawsuit against Consensys (the parent company of MetaMask), meaning that the battle that began in 2023 regarding Consensys providing staking and swapping services in violation of securities rules has temporarily ended. As shown in the figure below.

Consensys can finally get back to work. On February 28, MetaMask announced that it would add support for Solana in the second quarter and Bitcoin in the third quarter, while completely revamping the UI/UX and eliminating gas fees through account abstraction and other upgrades.

With the resolution of this lawsuit, analysts believe that the previously uncertain MetaMask token MASK may be back on the agenda, and Linea's LINEA token may also be launched ahead of schedule this year (2025).