On weekends, my friend Xiao Yang asked me again: Will policy changes lead to a collapse in the crypto world, and should I cut losses immediately? I've heard many similar questions.

To be honest, the market's fluctuation pattern is actually quite straightforward. Policy expectations → Market panic → Capital game → Bottom restructuring. Those who understand this logic buy the dip, while those who don't cut their losses. Today, I will break down this set of game rules clearly.

**The Three Stages of Capital Game**

Stage One: Expectation Release. Policy signals spread through various channels, and the market begins to digest them. For example, a major policy rumor causes Bitcoin to start loosening from the $122,000 position.

Stage Two: Rapid Decline. Panic triggers a sell-off, with many retail investors unable to withstand the psychological pressure and rushing to sell. The Nasdaq index, a market indicator, drops 3.56% in a single day, followed closely by the crypto market. Bitcoin's lowest point drops to $103,900, nearly a 15% daily decline. Liquidation waves erupt at this time.

Stage Three: Chips Accumulate. The market bottom forms, and smart money begins to quietly position itself. By this time, retail investors have already exited, and cheap chips are slowly absorbed.

**The key is to understand what each participant layer is doing**

Institutional investors and insider funds operate at a completely opposite pace to retail investors. Panic moments are precisely their opportunity to deploy. New investors often make the worst decisions at the worst times—panicking when their accounts shrink, regardless of whether the market will rebound later.

Market crashes themselves are not scary; what’s frightening is making wrong judgments at the wrong time. Those who seize the turnaround opportunities are always a minority who stay clear-headed during collective panic.