Many retail investors like to hold onto spot assets, believing the market will keep rising, fantasizing about a super bull market, unaware that altcoins entered a long bear market in March 2024!
Many retail investors fail to cut losses in time when slightly trapped, thinking they can just delete the APP and lie flat, but after several rounds of decline, they are deeply trapped, with almost nothing left, passively holding on.
The huge risk of the "holding" strategy in a bear market essentially confuses value investing with passive lying flat. The following is a key reason analysis:
🔥 1. Misjudgment of Market Cycles: Retail Investors Struggle to Accurately Locate the Bottom
Top Lock-in Trap
Most retail investors chase after prices at the end of a bull market (like users mentioned around "110K"), mistakenly taking a temporary high point as the starting point of the bull market, leading to deep entrapment at high positions. The bear market is long and the bottom is hard to measure; holding on may face over 80% declines (like some altcoins), and retail funds are limited, unable to bear years of unfreezing cycles.
Cognitive Gap of Cycle Transition
To truly navigate bull and bear markets, one must recognize macro signals (such as Federal Reserve policies, on-chain data), rather than simply "holding." Most advocates of holding lack the ability to judge cycles, leading retail investors to misjudge the start of a bear market as a "normal pullback," missing the best cut-loss points.
⚠️ 2. Liquidity Drain: The Fatal Wound of Frozen Small Funds
Opportunity Cost Sunk
Holding onto losing assets in a bear market will miss the opportunity to buy quality targets at low levels. Users emphasize that "reasonably avoiding big drops can accumulate," which is precisely to prevent capital utilization from dropping to zero. For example, in the 2023-2024 bear market, flexible position managers' returns far exceed those who stubbornly hold on.
Project Zero Risk
Especially in a bear market, altcoins face liquidity crises, with frequent incidents like exchanges delisting and teams running away. Holding on could completely wipe out assets, rather than just being a "temporary floating loss."
😱 3. Psychological Trap: The Risk Numbness of Boiling Frogs
Loss Aversion Effect
Retail investors often fall into a vicious cycle of "not wanting to cut losses": fantasizing about a rebound when down 10%, forced to "delete APP and lie flat" when down 80%. This psychology is exploited by the opposing party, becoming fuel for the main force's harvesting.
The Abyss of Passive Averaging Down
Users sharply point out: "Continuously increasing positions on losing coins is a profit opportunity for the opposing party." Averaging down requires strict conditions (e.g., no deterioration in fundamentals), otherwise, it resembles leverage suicide.
🛡️ 4. Alternative Strategy: Active Risk Control > Passive Belief
💎 Core Conclusion
Holding ≠ Value Investing: The former is lazy thinking, while the latter requires dynamic assessment of project fundamentals and market environment.
Bear Market Survival Rules: Retain over 50% cash to wait for extremely undervalued opportunities, avoid "catching flying knives";
Refuse Self-Delusion: Admitting mistakes and cutting losses is the first lesson for mature investors; cutting losses is for better offense.
Bull market profits come from β (market dividends), while survival in a bear market relies on α (active management) — mindlessly holding essentially hands over the fate of wealth to market randomness.
After seeing this, will you still hold onto spot assets in a bear market? Do you have similar heartbreaking stories? Feel free to share your story in the comments!
5. How to Improve Your Cognition?
My premium original article (sharing my predictions for the peak on May 23, the next peak on June 2, the bottom at 100718 on June 6, the peak on June 11, and the crash on June 17! Remember to copy the homework!) is worth careful study by every fan.
Two other original articles ([8 Point Dispatch] Iran's Beating vs. Bitcoin's Resilience: How Did I Accurately Capture the Oversold Rebound?) and (How to Judge BTC's Rebound Top at 106252? You Can Brag if You Copy the Homework!) are also worth reading for short-term trading fans.
I suggest everyone study the following self-media topics that I emphasized: [A High Win Rate Trading Model], [Wave Theory], [Chande Theory], [Gann Theory], [Wyckoff Method], etc. Then your bragging skills will be even better!
Please consciously read my premium tutorial article in the self-media (A High Win Rate Left-Side Spot Trading Model (Part 1)), which will greatly benefit you!
This Sunday, I will publish an article titled (A High Win Rate Left-Side Spot Trading Model (Part 2)) in the self-media tutorial article, introducing how to perform the second buy operation for left-side bottom fishing, and also methods for making early top judgments. Remember to follow on Sunday! Friends who want to learn must read!
To succeed in navigating bull and bear markets, one must improve cognition. We emphasize knowledge sharing, cultivating independent thinking, learning and accumulating in bear markets, and becoming others' dreams in bull markets. We welcome like-minded individuals who agree with our values and are willing to learn and develop independent thinking skills; only when you convert this knowledge and skills into your own accumulation can you possess the ability to think independently and avoid becoming a naive retail investor!
