Having immersed myself in the crypto market for 8 years and witnessed countless bull and bear cycles, today I want to use the recent price movements of $LIGHT to analyze the fundamental logic of crypto asset investing—no hype, no pie-in-the-sky promises, just how to interpret data and trends.

First, let's correct a common misconception. Many people treat crypto investing as a "bet on the size," chasing gains when prices rise and cutting losses when they fall, making losses inevitable. In reality, sound investment decisions should be based on data analysis and trend judgment. Following the crowd to add positions or panic selling will ultimately lead to the same outcome—loss of principal. Take $LIGHT as an example: many see it rising and rush in, only to get trapped at high levels. The root cause is failing to understand the underlying market logic.

So, what kind of market conditions are worth participating in? I’ve distilled three criteria. When all three are met, it’s a good opportunity to follow the trend; if even one isn’t, it’s best to stay on the sidelines.

First, assess whether the trend is valid. This can be seen from candlestick positions and moving average arrangements. For example, in this round of $LIGHT’s price action, the candlesticks have been consistently above the 5-day and 10-day moving averages, with the moving averages diverging upwards—this is a classic sign of an established uptrend. Conversely, if candlesticks break below the moving averages, or the moving averages converge or turn downward, even if there’s a rebound, it’s likely a false move, and participating will probably result in losses.

Second, observe whether volume supports the trend. A genuine trend must be accompanied by increasing volume. When $LIGHT breaks through key price levels, volume clearly expands, indicating real buying interest supporting the move.

The third rule concerns risk management—often the most overlooked. Before entering a position, think carefully: if this trade loses 50%, can you still sleep well? If your mindset collapses, even perfect data analysis won’t help.