Post-mortem: Why didn’t I reduce my position?
Reason 1: Cognitive bias in this bull market First, looking back on this bull market, we realize that we should not be too obsessed with the “pattern” of the market. Especially when the liquidity of large funds is no longer active, we should maintain a flexible strategy. Compared with the early bull market, the current market no longer has sufficient liquidity support. If you feel that your account has grown when holding assets such as altcoins or Ethereum, you should reduce your position in time to avoid losses caused by greed.
Reason 2: The bull trend is not lasting, and the market is always changing. In the market conditions in November and early December, the bull market pattern was once very strong, but after mid-December, the market momentum began to weaken. Similar to March and the previous bull market, the current market presents a tangled state, repeatedly setting new highs but failing to continue to rise. The interweaving of bullish and bearish news in the market has caused us to fail to adjust our strategy in time, thus missing a better opportunity to reduce our position. We did not really stand from a rational perspective and analyze the potential risks of the market in advance. For example, the change in the expectation of interest rate cuts in 2025 has begun to affect the capital flow and investment sentiment of the market, especially the risk aversion of large funds has begun to emerge. Many large funds have begun to transfer, but we have failed to respond in advance.
Reason 3: Interference of psychological factors Another important reason is the influence of psychological factors. Although we see that Bitcoin is blocked near $100,000 on the small-level chart and some positions have been reduced, there is still no large-scale reduction. Many times, we always have a fluke mentality, thinking that the market may rebound, and miss the opportunity to clear positions in time. This psychological effect makes us lack decisive decision-making when facing potential declines. In the past bull market, even if the market has a large correction, it often recovers in the short term. However, this time we did not foresee that the market may continue to decline, so we missed the best time to reduce positions.
