From what I've heard, the vast majority of people losing money in the crypto space are doing so due to emotional decisions—like hearing someone say a certain coin is good and can multiply several times, or seeing others making daily profits. Many get emotionally carried away and jump in without understanding the core of how others are making money, resulting in losses.
Those who dare to dive in and make money have a profound understanding of market emotions.
One group understands the emotions involved, while the other is swept away by emotions; those who understand eat away at those who are swept along.
People are the most susceptible to being carried away by their emotions. In other areas, this may lead to a loss of personal charm, but in the crypto market, being overwhelmed by emotions can result in being devoured by others.
Making money in the crypto world, as I've said before, is about not having your own emotions. When the market is favorable, you should dollar-cost average into the best assets; this is the simplest strategy. Don't keep changing your approach, and don't worry about how much others are making compared to you. These are all emotional distractions; you must completely clear your personal emotions and just buy day after day. However, many people suddenly change their investment amounts, the assets they invest in, and the timings of their investments. Unaware, countless tricks are errors stemming from emotions.
To transition from an ordinary person to an expert in the crypto world, you must learn to face the market without emotions while still being able to utilize them; that is the true mastery in the crypto space.
Many people invest in a coin and determine its worth based solely on valuation. They buy if it's undervalued and sell if it's overvalued, relying on the strategy of buying low and selling high. For example, if there is an asset A, with an undervalued price of 4, an overvalued price of 10, and a reasonable valuation between 5 and 9, they patiently wait for the price to reach 4 and decisively buy in. They never consider that when market emotions are out of control, valuation becomes impossible, resulting in the price dropping directly to 1. They think that such a drop must mean it will go to zero, so they cut their losses and sell.
When the market is abnormal, it is all about emotions, with no rationality. But the biggest profits often come from emotions.
The maximum money the market can give you is that part related to emotions. The money from overvaluation is quite stable, and your rigid valuation system can only allow you to grasp the edges of the valuation bubble.
In this situation, the market will definitely behave this way, and most people are making money from market valuations. This creates a lot of competition because many can understand it, while emotional bubbles often go unseen, so people won't act. If you can see through it, you can capture the largest profits.
You need to truly grasp the control of emotions, being able to hold steady while analyzing the emotional intensity of the market; this is the core of making money in crypto. If you consult experts in crypto trading, they are actually speaking the truth, but their control over emotions varies—some calm down with a few deep breaths, while others can't sleep at night. This is something only you can navigate.
You might see in groups that when someone mentions a good coin or a low-priced private sale, you can easily be misled and end up buying impulsively. However, some people have their own insights; the market hasn't yet shown the emotional intensity they are familiar with. They remain steadfast, patiently waiting for their opportunity amidst the storm.
The concepts of undervaluation and overvaluation in crypto are not very useful because your intense focus on them will skew your emotions. The market may be undervalued one moment and then quickly revert, but if you trade based on valuation, you might have already sold, only for the price to come back, and you end up losing money.
To root yourself in the crypto space and make substantial profits, it's not just about learning some techniques, looking at valuations, or understanding the fundamentals of crypto. These are merely the delayed evolution of market information. The core is the ability to utilize emotions. In fact, we can only observe the real-time changes in emotional aspects. For instance, during extreme panic, if you can recognize that the market is manipulating emotions to exploit people, your profits will come from those who fail to recognize the market's emotional landscape and are too afraid to buy. Conversely, when the market is surging, it attracts people in, inflating a massive bubble, and you can continuously exit during the emotional bubble, profiting from those who are overly excited and keep buying without selling.
Unable to utilize emotions means you can't make money, and fighting against market emotions can lead to significant losses.
The worst-case scenario is an apparent refusal to lose; if you fight against market emotions, you will definitely incur significant losses. For example, in futures trading, if you think about selling to break even or selling for profit, constantly adding margin in a losing battle, the more you resist, the more you become emotionally invested. You think that if you can just endure this time, everything will be fine, but your emotions are insignificant compared to the overwhelming emotions of the market, which can instantly consume your small resistance.
There are also people who buy spot assets and add to their positions when the price drops, buying a little more every 5% decline. When the price drops by 30%, they are already out of funds. The more it drops, the more they buy, thinking that if it rises by 20%, they will break even. However, it ultimately falls by 90%, which is a concrete example of using emotions to fight against the market, and this is absolutely to be avoided.
The assets that allow you to utilize emotions and follow market sentiment are the good ones. Stick close to them for profit.
Unbeknownst to many, there is a phenomenon called a drop without emotions, and it is not a good thing; so why would you keep buying into it?