Recently, the Crypto Assets market has experienced another wave of severe fall, attracting widespread follow from investors. In the face of this situation, how should we determine whether it is a Whipsaw or a dump? Here are some key judgment methods and coping strategies.

First, we need to clarify the difference between Whipsaw and dump. Whipsaw is usually a short-term market manipulation behavior aimed at clearing out weak holders; whereas dump means that large funds are gradually exiting. The key to judgment lies in observing trading volume, price support levels, and market sentiment.

In terms of trading volume, Whipsaw is often accompanied by a decrease in trading volume, while dump usually comes with an increase in trading volume. For example, if we see a price fall but with low trading volume, it might be a Whipsaw; conversely, if the fall is accompanied by a large volume of trades, it could be a dump signal.

The performance of price support levels is also very important. Whipsaw usually does not break through significant technical support levels, such as the 60-day moving average; whereas during a dump, these key support levels may be directly broken.

Market sentiment is also an important indicator. If the market is generally pessimistic but on-chain data shows that large holders are increasing their holdings, this may be a buying opportunity. Conversely, if you see large holders quietly reducing their holdings, even if the market sentiment is optimistic, you should remain cautious.

In the face of market fluctuations, how should investors respond? If assessed as a Whipsaw, one might consider holding on or moderately increasing their position; if assessed as a dump, then one should consider stopping losses or reducing their position. In any case, setting stop losses and avoiding excessive use of leverage is a wise move.

It is important to emphasize that the market itself does not deceive; the key lies in how we interpret market signals. Successful trading relies more on a deep understanding of the market rather than just luck. Continuous learning and enhancing one's market awareness is the key to long-term success in the Crypto Assets market.