Market Recap at the Beginning of 2026: Validation of a Trading Decision

Last September, I made a judgment based on the mean reversion theory of the yearly moving average—OK price was significantly above the yearly moving average, indicating a risk of a pullback. Subsequently, I completely cleared my position and switched to BN.

Interestingly, BN's performance was similar. After holding for less than a month, the price soared far from the yearly moving average, also showing a severe deviation. Seeing this signal, I again cleared all my positions and shifted to a wait-and-see approach.

Looking back now, these decisions have been validated. Whether it’s OK or BN, the weekly charts clearly show a convergence towards the yearly moving average. Although there may be rebounds in the middle, the main trend is gradually downward. It hasn't fully broken below the yearly moving average yet, but under a bear market logic, it’s only a matter of time.

**An Observation About the Yearly Moving Average**

I’ve noticed a pattern: no coin can escape the constraints of the yearly moving average. Even major coins like Bitcoin tend to fluctuate around the yearly moving average over the long term, running in a spiral pattern.

**Practical Approach to Buying Low and Selling High**

Since prices will eventually revert to the yearly moving average, the trading strategy is quite clear—buy in stages when value coins fall below the yearly moving average and form clear bottom patterns; sell in stages when the same coin’s price is significantly above the yearly moving average, forming a top. Repeating this allows you to stay in sync with the market rhythm.

**Three Stages of Market Psychology**

A detail worth noting: when a few people in the market start to be cautious about a bear market, while the majority are still in a frenzy, it’s usually a signal that a turning point is near. History always repeats itself in this way.

The progression of a bear market often occurs in three steps—first a few notice, then the majority wake up, and finally everyone agrees. When everyone believes a certain trend is eternal (whether bull or bear), it’s often the moment when the market is brewing for a reversal.

Avoiding coins whose prices are clearly above the yearly moving average may involve a long adjustment process, but by the time most people realize it, it’s usually too late.