Recently, many traders have been discussing the opportunity for a market correction after recent price adjustments. I decided to organize my analysis thoughts, which also serves as a recap of my recent review.

The question is actually quite simple—after a continuous surge, should one enter during a pullback? My answer is yes, but only with a light position strategy. The core judgment is based on the resonance of three technical signals.

First, the moving average system. When the short-term moving average crosses below the long-term moving average and begins to turn downward, this "death cross" signal is the first warning of a trend reversal. Next, look at trading volume. During the previous rally, volume gradually declined, which is a typical "volume-price divergence" phenomenon—prices are rising but trading volume is shrinking. Simply put, the upward momentum is insufficient, and the main funds are quietly distributing. Lastly, check the overbought indicator. The RSI has already broken through the 70 overbought line, indicating a very urgent need for a correction.

The probability of all three signals appearing simultaneously is not high, but once they do, it suggests that the chance of a correction exceeds 70%. That’s why I recommend a light position rather than a full-scale gamble.

At this point, many friends might wonder why only a light position. The reason is simple—cryptocurrency markets are far more volatile than traditional markets, and even the most precise technical analysis can fail in the face of sudden news. Even if all three indicators signal "a correction is coming," the market could suddenly reverse sharply. Therefore, the essence of a light position is to leave room for error, using small trades to hedge against this uncertainty. This has been a fundamental rule I’ve developed through years of trading experience.