There are two particularly critical lines on the Bitcoin weekly chart - the 100-week EMA and SMA, which now resemble a gallows, and the BTC price is stuck at $88,186.

Just flip through the K-lines of the past decade and you'll understand. In 2014, 2018, and 2022, as long as the weekly closing price broke below these two moving averages, the subsequent scenario was the same - a vertical plunge. The market has given this kind of trend a name, calling it "Goblin Town."

Why is this line so critical? Because it is the psychological defense line of large funds. Once it breaks, the stop-loss orders of position holders will trigger like a domino effect, causing liquidity to evaporate instantly. Historically, the price level of $70,000 has served as such a "liquidity graveyard."

You may have heard many people say, "This time is different." To be honest, those who said this in 2018 lost 80%, and in 2022, when FTX collapsed, some were also calling for a bottom. This time, the market still has the same old problem—there is no obvious increase in volume, no impulsive sentiment, only some technical buying support. This is not a reversal; this is a precursor to distribution. First, it gives you a height of hope, then takes it away all at once.

So the question arises: how to live?

One way is to reduce the volatility of positions. Instead of stubbornly holding onto BTC hoping for a rebound, it is better to allocate a portion to stablecoins for hedging. For example, products like USDD have several characteristics worth noting:

First is the backing. USDD is over-collateralized by ETH, BTC, and TRX with a collateral ratio and liquidity data that can be checked on-chain in real time, with no black box operations. During a black swan event, this multi-layered guarantee mechanism is much more reliable than a single backing.

Secondly, there are the earnings. Holding USDD can yield an annualized return of around 10%, which is considered an average level among current stablecoin products. What are the benefits? When the market declines, while others' positions are bleeding daily, your USDD interest is automatically compounded. In a market that drops by 10%, the interest can recover about 3%, thereby partially offsetting the risk.

Let’s talk about liquidity. USDD has sufficient trading depth on mainstream exchanges. During a waterfall decline in the market, you can quickly convert USDD to U to buy the dip, and if your judgment is wrong, you can swiftly convert back to USDD to continue earning interest. This level of flexibility in seconds is crucial during extreme market conditions.

The last point is the deflationary mechanism. The repurchase and destruction of TRX means that the total amount of collateral is gradually decreasing, while the supply of USDD remains relatively stable, which means that the asset support behind each USDD is increasing, positively supporting the value in the long term.

The operation suggestions are actually very straightforward:

Immediately convert about 50% of your BTC position into USDD to lock in a 10% annualized return. The benefit of this approach is that the interest can help alleviate the pressure from volatility.

Before the market closes tonight, you need to keep an eye on the $88,186 level. If it breaks down, the interest from USDD might actually help you profit from the subsequent rebound. If it holds steady, it indicates that the technicals have bottomed out, and you can consider gradually increasing your BTC allocation.

In the long run, the allocation of Bitcoin and stablecoins is like a seesaw of risk and return. When the market is highly volatile, the stability of stablecoins becomes apparent.