Let me take the recently popular Peach Blossom Source NFT as an example.
Entry price was 110,000. After 2 months, it rose to 500,000, at which point you are dreaming of 1,000,000, and some are dreaming of 10,000,000.
These people gather together to discuss, and the information they receive is all positive, all passionate, with no pessimistic emotions at all.
Narrow information has locked the overall sentiment of the Peach Blossom Source NFT market for them.
But because this NFT has a high unit price, it causes a lack of liquidity; its trading prices are destined to be very fragmented.
This means that it can only be traded a few times in a few days, and it cannot be done like BTC, where you can trade as much as you want in a day, and big funds can enter or exit anytime.
But the Peach Blossom Source NFT is something that big funds cannot enter, and they also cannot exit.
A little money can easily send it soaring, but a crash can easily halve its value; this is a manifestation of lack of liquidity.
I don't know if my words can be understood by novice friends.
So actually, when it rises to 500,000, it's very hard for you to cash out; you may only be able to sell for 450,000 or 400,000.
But you won't sell at this price, so you can’t sell. You just keep holding on.
In the past few days, the price fell to 240,000, and you are even less likely to sell because you have anchored this thing's value at 500,000.
I wouldn't sell for 500,000, so how could I sell for 240,000? Right?
When the price goes up again to 300,000, 500,000, or 600,000, you still won't sell, and then at that time it will drop again to 400,000.
Then it might fall to 200,000 or 100,000, and when you calculate at that time, you still lose 10,000, so it's better not to sell.
You think in your heart that you'll sell for 500,000 next time, but when the next rebound comes, it's only 300,000.
Finally 150,000, finally 50,000.
Then the 110,000 you bought may lead to a loss of 60,000. If it falls completely, then you will lose all 110,000.
Because if it falls to 50,000, it means it has completely collapsed, as you cannot sell it.
You are here to make money, not to lose money.
Trading coins is like this; everyone has this mentality, and then they lose all their money.
Other coins, once they lose value, cannot come back, because the market maker has left; they know this is unsustainable.
So waiting foolishly for him to break even is actually very unrealistic.
But if you bought BTC, even though you are a novice, you may also lose money due to buying at a high price.
But as long as you hold on, its price will come back; you just need to hold for a few more years.
Keep your mindset right, have a circle, and have people encouraging you. Then you won't worry.
I say the Peach Blossom Source is not good because, first, the NFT sector is on a downward trend.
Also, the major part of NFTs is on the ETH chain, and NFTs inherently lack liquidity.
So this Peach Blossom Source is now just a single-player currency for newcomers outside the circle.
Although he is also online, serious online players would not spend hundreds of thousands to buy this.
With money, you will definitely sell BTC, SOL, ETH, but you definitely won't buy this chart.
It's just a mutual cutting within a small circle, which shows that the consensus around this NFT is very low.
Without going through market testing, and you are using so much money to buy, this is obviously a very dangerous thing.
When buying coins, such as altcoins, it is best to buy those with stronger consensus, like altcoins valued at 10.
If you haven't been eliminated after two cycles, then you can actually gamble. In a bull market, you will have a chance to make money.
But with this NFT, it is very difficult to make money.
This is what I mean, beginners actually do not understand this consensus value, nor do they understand the concept of liquidity, and they lack the ability to acquire complete information.
So they are the lowest tier, the ones most easily harvested.
