The illusion of getting rich quickly.
This is one of the most deeply rooted illusions in the cryptocurrency market. Some people see individual coins skyrocketing dozens or even hundreds of times in a short period and mistakenly think that the cryptocurrency market is a shortcut to easy profit, ignoring the extremely low probability and survivor bias behind these cases.
The truth is that behind coins that experience short-term surges, there is often manipulation by large players and market hype, making it difficult for ordinary retail investors to grasp the right timing for entry and exit. Most coins tend to plummet to zero after speculation, and historical data shows that over 90% of altcoins ultimately lose more than 90% of their market value, with the wealth behind it being a significant loss of principal for many investors.
The misconception that technical analysis and candlesticks can accurately predict the market.
Many people are obsessed with studying candlestick patterns and technical indicators, believing that technical analysis can accurately predict coin price trends, even forming 'guaranteed profit strategies'.
The cryptocurrency market is relatively small and can easily be manipulated by institutions or individuals with large amounts of capital. Candlestick charts and indicators may be deliberately drawn to mislead retail investors. In a highly speculative market, technical analysis serves more as a psychological comfort rather than a reliable predictive tool, as the short-term trends of the market are fundamentally very random.
The illusion of having an information advantage through insider news.
Many retail investors blindly trust the analyses of insiders, believing that obtaining exclusive information will allow them to position themselves in advance. Various communities and social media are filled with statements like 'This coin is about to skyrocket' and 'Institutions are building positions', but these are often just hype or scams.
Truly valuable information will not be publicly disseminated. So-called insider information is often a smokescreen released by manipulators to offload their holdings, or methods used by Ponzi schemes and worthless coins to attract investors. Behind these actions may be the intention to earn commissions or to inflate coin prices for personal profit, making retail investors blindly follow trends and easily become bag holders.
The illusion of judging a good coin by its rising trend.
Some believe that as long as the coin price rises and many people buy, it's a good coin, ignoring the underlying logic of the coin.
Short-term movements may be driven by speculation rather than real value. For instance, many Ponzi schemes and worthless coins create consensus through marketing techniques to attract retail investors, but they lack practical applications and profit models, ultimately leading to collapse. Truly valuable cryptocurrencies build consensus based on long-term market testing, technological consensus, and application scenarios. However, even mainstream coins experience high volatility and are not guaranteed profit assets.
The lucky mindset of leaving the market before a crash.
Retail investors often hold a 'take profit when it's good' mentality, believing they can stop losses in time before a market crash. However, in practice, greed and fear lead to distorted decision-making—wanting to wait for a bit more gain before selling when prices rise, or hoping to wait for a rebound before selling when prices fall, ultimately leading to being trapped.
In the cryptocurrency market, extreme fluctuations are the norm. Even professional investors find it difficult to accurately grasp the peaks and troughs, and retail investors are at a disadvantage in terms of information, capital, and mindset. The idea of leaving the market by luck is essentially an underestimation of market risks.
The biggest illusion in the cryptocurrency market is viewing a high-risk market with a speculative mindset, neglecting the essence of value and the bottom line of risk.
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