$ETH Market: The Psychological Game Between Retail Investors and Institutions
Today's Long-Short Ratio: 51.5 to 48.5, with bulls slightly in the lead, but after a few hours of consolidation, the long-short ratio is nearly 1:1, and the strength of the bears should not be underestimated. Let's take a deeper look at the 'thoughts' of retail investors and institutions in the market.
Many retail investors have been trapped for a long time. When they finally wait for the Ethereum price to rise to the breakeven point, they panic and decisively close their positions, unaware that this sell-off might mean missing out on subsequent gains, much like getting off a roller coaster midway and only being able to watch others reach the top.
Some retail investors have already made profits during the uptrend. When the market consolidates, they start calculating: 'The price has risen so much, it should correct now. I'll sell first, and buy back at a lower price, maybe even short to make a profit.' As a result, they sell Ethereum and open short positions, but the market often goes against their expectations, continuing to rise, leading to losses on both sides.
Some retail investors open short positions, and when the market rises, they not only do not close their positions but also comfort themselves: 'It has risen so much, how much higher can it go? I'll add margin and hold on.' They ignore market trends and stubbornly hold their positions, and if the market continues to rise, their margin can quickly get wiped out, leaving them with regrets.
Cutting losses at lows, blindly shorting
Retail investors who once cut losses at lows see the price of Ethereum soar and feel deeply regretful: 'Cutting losses before was so foolish, I didn't benefit at all from the rise, I'm not convinced!' To prove they were right, they recklessly open short positions, completely disregarding the risks, resulting in even greater losses.
Institutions are generally shrewd and calculating. Over the past six months, they have been 'washing' retail investors by crashing the market, while accumulating a large number of low-priced chips. When the time is right, they quickly push the price up, not giving retail investors time to react, thereby avoiding increased costs of pushing the price.
At this point, institutions will let the market consolidate or slightly adjust, giving retail investors space to 'operate.' Retail investors, driven by the aforementioned mentality, make erroneous decisions, and the fuel for shorting keeps accumulating.
When institutions feel that the selling pressure has been released and the shorting strength has accumulated sufficiently, they will make another strong move to push the price up, and they will never allow a significant market correction. Because they know that retail investors are hoping for a correction to enter, if a real correction occurs, retail investors will jump in, increasing the institutions' costs of pushing the price, which institutions are not willing to do.
The market changes every day; don’t let your mindset get too tight. If you always feel like you're a step behind or disturbed by market noise, feel free to reach out.
