We have said many times that the main reason for the biggest financial losses of a trader is their own brain, forcing them to act irrationally.
Because markets are not mathematics, but psychology.
But there is one interesting point - as a rule, the mistakes that lead to money loss are made by traders almost simultaneously.
The first to notice this was Lefevre (an American trader from the 1930s). He said that traders make the most mistakes and lose money in the last 1/8 of the movement in either direction.
That is, in the last 1/8 of the rise, they expect its continuation and act accordingly. They open new trades, do not take profits, and abuse margin trading.
At this stage, confidence in further growth is at its maximum.
But in the last 1/8 of the decline, they act the opposite. They sell at a loss, open shorts, missing the opportunity to buy the asset cheaply.
This is currently confirmed by on-chain data.
Bitcoin was just above 100K at the beginning of January. Then it updated its highs, reaching almost 110K, then fell to 74500, now just over 3K remains to return to 100K.
The last 1/8 of the decline is the area of 79000-75000.
Most shorts were opened in this area. A little less, but still a lot - opened in the area of 82000-85000.
It's clear that they all closed either by stop-loss or liquidation. That is, they only brought losses to their authors.
But there are also assets sold at a loss. I know those who sold Bitcoin at a loss below 80K (although there are not many of them). But those who sold Ethereum below 2K, justifying it by saying that Ethereum is *** - there are really quite a few.
From the perspective of logic and common sense, such actions are absurd - cheap should be bought, not sold.
In life, most people do just that - in the store there are discounts - they buy, prices for real estate have fallen - they try to buy while it's cheap, car prices are falling - even those who weren't planning to buy buy.
But the conditions of maximum uncertainty (and the market is uncertainty) somehow shut off the brains of many.
Currently, there is maximum weakness in altcoins while Bitcoin is rising. This reminds me of the winter of 2020-2021, when Bitcoin's dominance index reached 70%, Bitcoin was rising, while altcoins stood still or fell.
But then market cycles worked (how they work - read here), the rise of Ethereum began, followed by other altcoins.
With a high probability, regarding Ethereum and most TOP-altcoins that are not growing, we see that very last 1/8 of the movement.
Right now, most market participants are exiting (and a large part have already exited) the asset due to disappointment and disbelief in growth.
What will happen next is quite predictable. Altcoins will rise (for the market cycles have not been canceled), while the crowd will buy them at prices 2-3 times higher than the current ones, because earlier it will be scary.
And the most massive purchases will be at the very end of the rise, the last 1/8 of the movement.
- To get a different result (to bring money not to the market, but from the market), it is enough to act just the opposite.
"TAKEN FROM THE MAIN CRYPTO CHANNEL"
