Our brains are programmed to seek reasons for everything, even when there are none. This helped survive in the wild, but in markets — it's a trap that distracts us from the plan and leads to emotional trading. This is how the illusion of causality works and how it affects trading.

What is the illusion of causality?

• The essence: The brain automatically links events, even if there is no connection between them. For example, a primitive person heard rustling in the bushes and fled, thinking it was a tiger, though it was the wind. Mistake? Yes, but it saved lives.

• In the markets: We see price movement ($BTC falling or rising) and look for a 'reason' in the news, although the market often moves due to technical factors (liquidity zones, whale actions).

• Media: The media amplify this 'buzz' by concocting explanations. The market fell? Blame the war. It rose? A new US-China deal. This is noise that confuses.

Market examples

1 Debate between Musk and Trump

◦ Recently, the market ($BTC $105,428 on 13.06.2025) fell due to the 'war' between Musk and Trump (Tesla shares dropped by 14%). Traders panicked, selling $BTC and $ETH, although the correction to $99,200–98,200 was predictable based on technical levels (liquidity zone).

◦ The market quickly recovered to $105,000, and the 'cause' was called 'reconciliation'. In reality, the move was technical — whales collected stops and went up. Personal relations between Musk and Trump do not affect $BTC, but traders lost profit due to emotions. #EmotionsKill

2 Iran and Israel War

◦ Recent news about Iran's 'terrible response' scared the market. $BTC dropped by 2% (from $107,000 to $105,428), $ETH ($2,631) and $SOL ($182) also weakened.

◦ But history shows: markets fall on expectations of conflict, and turn around on fact. For example, after the Hamas attack on October 7, 2023, $BTC fell by 5%, but then surged by 100% without retracements. Now TOTAL3 (~$800 billion) is holding, and the correction in $BTC may end with a rise to $110,000.

◦ Traders who associate the drop with the war miss entry points ($BTC ~$99,200, $ETH ~$2,400). #NewsManipulate

How does this affect trading?

• Emotional trap: Traders ignore technical levels (for example, $BTC $99,200–98,200 as a liquidity zone) and react to headlines. This leads to sales at lows and purchases at highs.

• Whales play on this: Big capital uses media noise to gather liquidity. For example, panic over Iran could drop $BTC to $99,200, where whales buy back stops before the rise.

• Statistics: According to Glassnode, 60% of retail traders lose money due to emotional trades provoked by news. Those trading based on technical levels have a ROI 20-30% higher.

My thoughts

The illusion of causality is like FOMO, only worse. It makes you look for 'culprits' in the news instead of analyzing charts. The market is not driven by headlines about Iran or Musk — it moves based on liquidity and whale actions. For example, $BTC.D (62.15%) signals weakness in alts, but a drop to 55% will trigger an alt season ($ETH to $3,000, $SOL to $200). Ignore the noise and focus on levels, risks, and plans. #TechnicalAnalysis

Conclusion

The illusion of causality makes traders react to news rather than levels. The market can rise without 'positive' news or fall despite 'good' headlines. Focus on technical analysis ($BTC $99,200, $ETH $2,400) and maintain risk management. Whales use panic to collect liquidity, so don't become part of the crowd. Wait for clear signals and catch profit, not emotions! 😎 #CryptoPsychology #Trading #IllusionOfCausality