In mid-August 2025, the price of ETH staged an emotional contrast drama at $4400.
Last week, when the price broke through this level during the upward movement, the market was euphoric—holders watched their accounts swell with unrealized gains, comparing it to the $1400 phase low or their own entry cost, filled with satisfaction from 'excess returns'; yet, over the past two days, as it pulled back from $4788 to the same level, investors were generally frustrated, staring at diminished unrealized gains, lamenting, 'It has dropped so much from the high point.'
The same price, just a few days apart, why do those with unchanged positions have such drastically different emotions? The answer lies in the psychological 'anchoring' effect: the former anchors to 'past lows', while the latter anchors to 'recent highs'. Different reference points lead to naturally different feelings.
Analysis: The impact of psychological anchoring on investment.
This anchoring psychology can be both an 'invisible assistant' in investing and a potential 'deadly trap'; the key lies in whether one can actively identify and utilize it.
First, let's talk about profit-taking: Don't be trapped by 'high point anchoring'.
As mentioned earlier, signals such as liquidation amounts exceeding $1.5 billion and breaking below the 120-day moving average can serve as withdrawal bases, but such signals are often lagging—by the time the data is clear, the price has already dropped significantly. If one gets trapped by the thought of 'not selling at the highest point' (for example, anchoring to the peak of $4788), they might miss the opportunity to reduce their position at $4400. The rational approach is: if one judges that risk has arrived, then one should let go of the obsession with high points and act according to the established strategy to avoid further loss of unrealized gains.
Revisiting the pitfalls: Beware of the 'false anchor points' in altcoins.
Psychological anchoring is more likely to lead to pitfalls in the altcoin market. Major players often manipulate the market by driving a coin that costs $1 up to $100, creating a 'high price anchor'. Subsequently, during a prolonged decline, retail investors may blindly buy at $80, $60, or even $10, thinking these are 'low prices' because they anchor to the historical high of $100. However, these anchor points are bubbles—most worthless altcoins have a true value far below this, and $10 might still be 10 times higher than their intrinsic value. This is why it is repeatedly emphasized that 'do not buy more as altcoins fall'.
Market outlook: The trend remains unchanged, but there may be a need for short-term consolidation.
Returning to the current market situation, my judgment is: the medium to long-term upward trend has not yet ended, but in the short term, it may enter a consolidation phase.
There are two core reasons: First, the pace of institutional buying has slowed; the previously mentioned $20 billion in funds has no new movements, and the buying power of major players like MicroStrategy has weakened. Second, there is pressure from unlocking stakes that needs to be digested—currently, 880,000 ETH are queued for unlocking (about $4 billion). Although there is $3 billion waiting to be restaked, the former represents immediate potential selling pressure, while the latter is already realized buying. If the subsequent buying speed of companies like BMNR does not keep up, the short-term market may need to adjust to digest the pressure.
Conclusion: Break free from anchoring and respond rationally.
In market fluctuations, the price itself is just a number; what often affects emotions is the 'reference frame' in our minds. Understanding the rules of psychological anchoring allows for decisive withdrawal during profit-taking and helps maintain a bottom line in the face of temptation. Regarding the current adjustment of ETH, there is no need to feel frustrated due to short-term pullbacks, nor should one be blindly optimistic due to past gains. By anchoring on value and trends, one can maintain stability and long-term success.
