Currently, the cryptocurrency market is more heated than ever, filled with temptations of 'changing fate'. But behind the dream of financial freedom, a moment of carelessness can lead to bankruptcy overnight.

I am not speaking theoretically, but summarizing lessons learned from my own real experiences.


Especially now, with Federal Reserve Chair Jerome Powell influencing global asset prices with policy, every step taken is crucial. Today, we will systematically understand the five most common fatal mistakes novice investors make and how to avoid repeating them.



Error One: Investing more than you can afford to lose


This saying is well-known: 'Invest only with money you can afford to lose', but in reality, 99% of people do not truly understand it.


In the crypto market, every day feels like a roller coaster. You might have been thinking about buying a car or house the night before, only to wake up the next day with half your investment lost. The problem is, many people do not have the most basic risk plan in place before investing.


Practical Advice:


  • Take the amount you plan to invest and cut that number in half.


  • Then ask yourself: If this amount of money were to be completely lost, would it affect your life? If the answer is no, it means you are investing too much.


Before stepping into the crypto market, you must ensure you have at least three to six months of living emergency funds, kept in a separate account, completely isolated from crypto operations. This is your life-saving money, not an 'investment fund'.


History has proven countless times, such as in the 2022 FTX crash, when many investors returned to square one overnight. Those without a safety net ultimately had no chance to turn things around.



Error Two: Blindly following the 'crypto influencers' beacon


Nowadays, when you open social media, you will be inundated with various videos and posts about the 'next hot token'. They claim to have found 'tenfold coins' and 'hundredfold coins', but in reality, most are paid promotions.


Many so-called 'recommendations' are just platforms for the manipulators. By the time you rush in, the price has been driven up, and the project team and influencers have quietly exited, leaving the retail investors to take the loss.


Pitfall Avoidance Tips: '3T Review Rule'


  • Technology: What real problem does the project solve? Is there actual application?


  • Tokenomics: What is the total token supply? Is the distribution reasonable? Are there lock-up and release plans?


  • Team: Who are the people behind it? What is their past project experience? Do they have credible backgrounds?



Always remember: Truly valuable projects do not need influencers to create their presence.



Error Three: Buying high and selling low, driven by FOMO emotions


"FOMO" (Fear of Missing Out) is the number one killer of newbies in the crypto market.


For example, in 2021, when Dogecoin surged, everyone rushed to buy DOGE at 70 cents, fantasizing it would reach 1 dollar. What happened? A sharp drop and significant losses.


Correct Mindset:


When you realize you impulsively bought due to fear of missing out, calm down immediately.

The rise has already happened; you are not here to take off but to chase the high. Truly smart investors always patiently wait for opportunities rather than chase trends.


The market always has opportunities, but the ones that truly belong to you are the ones you choose calmly, not those swept up in emotions.



Error Four: Heavily betting on new coins with no substantial products


Countless new projects paint a picture on their whitepapers, promising to 'change the world', but very few deliver actual products.


New coins are like startups, most will eventually go to zero. You wouldn't invest all your savings in a startup that doesn't even have a website, so why do it in the crypto market?


Correct Approach:


  • Confirm whether the project has a Minimum Viable Product (MVP).


  • Are there actual users? Is there a clear application scenario?


  • Has it received investments from credible institutions?



Only bet on projects that actually exist, can be used, and have real demand support. Others, even if they seem tempting in the short term, should be avoided.



Error Five: Misusing leverage, overextending into the future


Using leverage in the crypto market is extremely tempting. Platforms will tell you: '5x returns, 10x profits.' But what they won’t tell you is that losses are also magnified.


In the bear market of 2022, Bitcoin was halved, and those who used 2x leverage did not just lose 50%, they had their accounts completely wiped out.

Moreover, once high-leverage trading encounters extreme market conditions (common in the crypto market), your liquidation often happens in the blink of an eye.


Survival Rules:


  • Beginners are strictly prohibited from using leverage.


  • At any time, protecting your principal is far more important than chasing excessive profits.


  • Only those who stay in the market long-term have the chance to win the future.



Only the prudent are qualified to wait for the next real bull market wave.



Why is caution especially needed now?

Currently, Federal Reserve Chair Jerome Powell is controlling the switch of global liquidity. His words can cause global asset prices to fluctuate violently.


In such a macro environment, although there are many opportunities in the crypto market, there is also extremely high uncertainty lurking. When the turning point of liquidity tightening arrives, all asset prices will drop simultaneously, and it often comes suddenly and violently.


Therefore, protecting your principal and investing rationally is more important than ever.



Final Advice

If you genuinely want to survive in the crypto market long-term, and not just take a gamble, please engrave these five survival rules in your heart.


In this turbulent market, Mlion.ai's intelligent trend tracking, on-chain capital flow analysis, and whale movement monitoring can help you grasp the market direction in real-time, make more rational, data-driven investment decisions, and avoid the disasters brought by emotional trading.


Caution is the most valuable practice before the arrival of a bull market.


Remember: True financial freedom does not come from getting rich overnight, but from every cautious choice, accumulated bit by bit.



Disclaimer: The above content is for informational sharing only and does not constitute any investment advice. Cryptocurrency investment is highly risky; please make rational decisions based on your own risk tolerance.