Having navigated the crypto market for years, I gradually realized a harsh reality—most retail investors lose money, not because they choose the wrong coins, but because they make the wrong decisions at critical moments. Should I hold firm or escape? This question has troubled me for a long time.

Until later, through observing repeated market cycles, I developed a methodology to distinguish between shakeouts and market tops. It’s not some mysterious technique; it’s about learning to read the story behind the candlesticks.

**Shakeouts and market tops are fundamentally not the same thing**

When I first entered the crypto space, I was no different from most beginners—panicking at dips, getting excited at rises. Once, a coin surged 20% in a single day and then started to decline, so I sold all at once. What happened next? It rose another 50%, and I missed out entirely.

After that lesson, I began systematically studying market behavior. I found that the key lies in: a rapid rise followed by a slow decline is often a shakeout; whereas a volume-driven sharp spike followed by a sudden crash is a true market top signal.

**How to tell the difference? Look at these indicators:**

The characteristics of the shakeout phase are very clear. Although the price is falling, the 60-day moving average still maintains an upward trend. During the correction, it’s also quite particular—it usually doesn’t effectively break below the 30-day moving average. Trading volume gradually diminishes, and the downward momentum clearly weakens, indicating limited selling pressure.

Market tops, on the other hand, present a completely different picture. Prices will volume-spike and stagnate or even start to decline. Multiple moving averages shift from tight consolidation to diverging downward, and the 60-day moving average can’t hold and begins to flatten or turn around. At this point, trading volume often surges dramatically, indicating major players are frantically offloading.

**What about real cases?**

I remember observing the trend of ETC once—an intraday surge of 30%, which is already quite exaggerated. But when I focused on volume and moving averages, the whole picture became clear. Although volume also increased, its quality was questionable; multiple moving averages showed signs of divergence downward. These details combined are signals of a market top. Sure enough, the subsequent movement confirmed my judgment.

In contrast, shakeout patterns are much more restrained. Although declines happen, each dip is supported clearly, and the moving averages never risk losing their footing. At such times, it’s actually a good opportunity to buy on dips.

**Why does this method survive in the market?**

The pace of the crypto market is very fast; a wrong judgment can cost you dearly. But if you can grasp the true intent of the market from a technical perspective, you can avoid most common mistakes. The difference between shakeouts and market tops, simply put, is the contrast between confidence and exhaustion—one still has room to rise, the other is already exhausted.

Of course, no technical indicator is 100% accurate. But when multiple signals resonate together, their reliability significantly increases. That’s why I recommend observing price, volume, and moving average systems simultaneously—they combine to give you a more three-dimensional view of the market.