What is the fundamental reason for losses in cryptocurrency trading???

Many people do not understand the market well enough and are easily influenced by emotions, making irrational decisions. Let me give you an example, explained in simple terms:

Day 1: You have 1 million, and you take out 700,000 to buy a type of virtual currency.

Day 2: This currency drops by 1%, you lose 7,000, but you think to yourself, it's okay, it will eventually go back up.

Day 3: It drops another 3%, you lose almost 20,000, but you still remain calm, believing it will go back up eventually.

Day 4: It rises by 2%, you regain 10,000 of your capital, and you feel quite happy, thinking everything is under control.

Day 5: It suddenly drops sharply, you lose nearly 70,000, you start to worry a bit, but still hope it will go back up on the next trading day.

Day 6: It rises by 4%, you breathe a sigh of relief, feeling that cryptocurrency trading still has some patterns to follow.

Day 7: It rises by 1%, you start to expect it to continue rising.

Day 8: It rises by another 1%, although the increase is slow, at least you are recovering your capital, and you feel quite satisfied.

Day 9: It suddenly drops by 8%, you start to panic, wondering if you picked the wrong currency.

Day 10: It drops by another 4%, you start to get angry.

Day 11: It hasn't dropped; you firmly believe that your currency price is about to rebound.

However, in the following week, it does not rebound and instead stays flat. You go online to learn some cryptocurrency knowledge, thinking this flat trend might be the main force accumulating positions.

You continue to hold this currency for a month, and it not only does not rise but instead drops nearly eight points. You start to feel numb, thinking that if you could just break even, you would withdraw your money and never trade cryptocurrency again. But things do not develop as you hoped; the currency you bought continues to drop, and at this point, you finally understand a new concept - stop loss.

You feel very uncomfortable, torn, unsure whether to cut your losses and exit or to continue holding. This reflects the true experience of many cryptocurrency traders.