Viewing from the Taoist yin-yang philosophy: the yin-yang balance technique of Crypto Assets

Author: hitesh.eth, encryption KOL

Compiled by: Felix, PANews

Yin and Yang is a concept in Chinese philosophy. It refers to the perfect balance between two forces that are interrelated but opposing. In the field of cryptocurrency, this force is everywhere—chaos and order, risk and stability, greed and patience. Understanding how they interact is key to navigating the market.

This article will explore how to apply the concept of Yin and Yang to cryptocurrency, first outlining the Yin and Yang forces in the encryption field, and then exploring how to balance them to achieve better results in trading and investing.

Yin

Yin represents the darker, impulsive, and chaotic forces in the world of encryption.

You cannot escape them. Even if you try to avoid them, they have already become deeply ingrained in the essence of cryptocurrency. The shadow concerns irrational behavior, speculation, and the temptation of shortcuts. If you completely reject it, you might avoid losses, but you will also miss out on the huge profits that initially attracted you to the crypto space.

The key is not to avoid the shadow, but to learn to coexist with it—so that it does not influence your decisions.

Degeneracy (gambling nature)

Degeneracy is the most enticing shadow.

During a bull market, the Degen (gambler) mentality prevails. The air is filled with FOMO, the timeline is full of victories, and everyone seems to have made ten times their investment overnight. Logic becomes a faint whisper, while hype turns into a deafening roar. Degens blindly follow the trend to buy tokens, often without reading the white paper or even understanding the tokens.

Why? Because Degen gives people a false sense of freedom. It makes you feel like you are breaking free from rules, systems, and research. By clicking buy, you are participating in an act of rebellion.

But this stimulation comes at a cost. Acting on emotion in a highly stimulating environment causes your brain to chase the pleasure of dopamine rather than sustainable gains. Over time, you may become addicted to impulsive trading. The end result of this cycle is not wealth, but liquidation and exhaustion.

However, there is a paradox here: if you never act like a Degen, you might miss life-changing opportunities. Some of the fastest tenfold or fiftyfold opportunities often come from reckless bets. This is why Degeneracy should not be eliminated – but tamed.

KOL

Key Opinion Leaders (KOLs) dominate the encryption field. They are a lifeline as well as a minefield.

The "yin" evil side is obvious: most KOLs are entertainers rather than researchers. Their goal is to attract attention, not accuracy of information. Many token promoters pretend to know the next hot trend to make money, cultivating a cult-like following. They flaunt a lifestyle that makes you eager to emulate, but these KOLs often abandon the audience influenced by them behind the scenes.

Following the wrong KOL is like chasing a mirage in the desert. The further you go, the more you believe there is water ahead, until you collapse from thirst.

But there is a problem here: you cannot completely ignore KOLs. They are the pulse of the encryption culture. They can amplify early narratives, bringing high-quality projects that have not yet been discovered by those tools to the forefront, and convey information from the cutting edge to a wider audience.

The challenge is not to avoid KOLs, but to filter them. The best KOLs are not necessarily the loudest voices—but those who have capable and sharp followers, the quiet ones. They explain rather than hype. They guide you to the forefront of the market rather than recommending a particular token. With the right filtering tools and continuous tracking, you can distinguish noise from signal.

In this way, the "evil shadow" becomes a tool for discovery.

Trenches

If Degeneracy is the fuel, KOL is the signal, then Trenches is the battlefield.

The trenches are private Discord channels and Telegram chat groups, private groups where hunters dig for early treasures. Unlike those encryption KOLs who join later, these people do not show off – they work hard. They scrape contracts, study documents, look for little-known development teams, and map out the entire ecosystem before others notice.

Being in the trenches will give you a rare opportunity: early exposure. When CT starts to promote a narrative aggressively, frontline players have already earned five times their profits.

But being in the trenches is not foolproof. It requires time, investment, and constant vigilance. The narrative changes rapidly, and if you hold your ground on a particular front for too long (for example, when the market shifts to RWA or DeFi, but you are still focused on AI), it could harm your portfolio.

Lesson: Trenches are the cradle of alpha returns, but not the destination. Without broader awareness and background knowledge, you will be overwhelmed by weak signals.

Yang

Yang represents the clarity, structure, and order of balanced chaos.

It is about building beliefs from research rather than emotion. It is about using data, tools, and narratives to filter out noise, validate Alpha returns, and precisely seize trading opportunities. However, like Yin, excessive Yang can also backfire. Too much Yang can make you rigid, blind to new opportunities, and always late to the game.

The goal is not to always live in the light, but to let the light guide and stabilize the dark.

data

Data is the cornerstone of Yang.

Smart fund tracking, on-chain fund flow, wallet dynamics, open contract charts, and technical analysis indicators can provide you with an objective perspective to assess Alpha returns. Data does not lie, but it also does not tell you the whole truth. Most signals have a lagging nature. By the time the data confirms a trend, the early high profits have often slipped away.

This is why data should never be your starting point – it should be your filter. When Yin provides you with Alpha returns from KOLs or market trends, Yang verifies it. Data can help you answer: "Is this real or just hype?"

Technical analysis can make your entry and exit points more precise. On-chain dashboards can reveal whether whales are really buying the assets that are being hyped with CT. Without this verification, you are gambling rather than trading. With it, you can have the probability advantage in your hands.

tool

Data without tools is like gold buried underground. Tools can dig it out.

TradingView is used for technical analysis, Nansen is used for wallet analysis, Kolscan is used for tracking KOLs, and DEXU.AI is used for narrative heat maps. Even AI assistants like ChatGPT or Perplexity can now perform quick technical analysis or explain token economics in simple language.

But mastering is more important than having more tools. Using ten tools in a scattered way will only allow you to skim the surface. Choosing one or two tools and using them every day will make you powerful. The more familiar you are with them, the quicker you will be able to notice things that others overlook.

Tools will not replace intuition—they will sharpen it.

narrative

Narrative is the intersection of yin and yang.

Every bull market is driven by narratives. A narrative is a story that explains why one believes a certain token, sector, or ecosystem is important. From the summer of DeFi to the NFT frenzy to AI coins, narratives have a far greater impact on liquidity than fundamentals.

But the narrative is also unpredictable. They rise rapidly, attracting capital, and then crash after the hype subsides. If you react slowly, you will be trapped.

The key is to see the "spark" before the "fire spreads." The narrative begins in small circles—Alpha groups, unknown Twitter accounts, GitHub repositories—before it eventually erupts into mainstream narrative. The earlier you identify them, the more rewarding the returns.

Narration is the compass that coordinates the order of "Yang" with the chaos of "Yang".

Balance: Yin + Yang

Victory in the field of encryption is not achieved through unorthodox means: neither through blind degeneracy nor through rigid analysis.

Winners are those who can master balance.

Yin gives you sparks: early gameplay, high-risk gems, and narratives that no one believes. Yang provides structure: verification, timing, and order. Together, they form a cycle of discovery and confirmation.

Achieving balance is never perfectly possible. It is like a dance, constantly adjusting with the evolution of the market. But if you can recognize these two forces and maintain discipline in their application, you can not only survive in the encryption field but also thrive in it.

Related Reading: Interview Transcript with Trader Eugene: Newcomers Should Focus on On-Chain Assets First, as Most in the Market Do Not Care About Fundamentals.