Yesterday early morning, I was awakened by a pop-up from my trading software. When I looked at the screen, I almost couldn't sit still—an asset suddenly dropped to around 5.8, and the community was completely in chaos. Some were shouting "zeroing warning," and others were already placing sell orders to cut losses. But amidst this panic, I actually saw an opportunity. I quietly built a long position around 7.958 and ended up making a profit of 1000U, sleeping soundly afterward.

Honestly, it's not that I'm particularly brave, but the signal indicating a potential bottom in this sell-off was just too obvious. Today, I want to share a method to judge whether a panic sell-off has bottomed out—three core signals that must all be present.

**First Signal: Speed of recovery after a decline.** The key here is that after a large bearish candle, the price didn't continue to fall but instead quickly rebounded as if equipped with an accelerator. What does this mean? It indicates that the selling pressure has been cleared out in one go. The remaining traders on the order book are either long-term holders or smart funds waiting for the right moment. The selling volume no longer has enough strength to push prices down further. It's like a clearance sale at a market—initially, everyone is frantically selling, but once the inventory is sold out, prices naturally stabilize, and some buyers even start to pick up bargains.

**Second Signal: Repair of short-term K-line structure.** I looked at the hourly chart. The lower shadow is as deep as a fixed sea god needle, and the successive lows are gradually rising. This shows that the bulls are gradually taking control. Many beginners are easily frightened by a large bearish candle but forget to observe the subsequent structural changes. In the crypto market, a single candle doesn't tell the whole story; the key is to look at the continuous trend. Once the lows start rising and the highs are slowly moving upward, it indicates that the bearish momentum is weakening.

**Third Signal: Volume and open interest performance.** During a sell-off, the volume needs to be sufficiently large, indicating genuine buyers are absorbing the sell orders. If the volume then begins to shrink, that's actually a good sign—showing market sentiment has shifted from extreme panic to cautious waiting. Many investors who were panic-selling have already exited, leaving behind only confident funds.

To summarize: rapid recovery + structural repair of K-line patterns + volume confirmation—when all three are present, the probability that the sell-off has bottomed out is quite high. Next time you encounter such a market condition, try analyzing it with this approach—you might also find real gold in the panic.