馃毇 Avoid this Trap!
I see a lot of post on Binance Square and X were people boast about the number of crypto cycles they've experienced in the past and even give a forecast of price direction.
The trap most traders and investors fall into is the over reliance on past data as a signal for future conditions.
In the crypto space where innovation and change are the lifeblood of progress, you can't really blame traders and investors for their priority to historical data.
Why do I say this?
Traders & investors are always making imperfect decisions with limited information about the things that will have a massive impact on their wellbeing.
The most important driver of anything tied to money is the stories people tell themselves and the preference they have towards various crypto projects.
So over reliance on historic data could lead to overconfidence and the temptation to accurately predict the direction of the market.
The key here is to accept that the future might not look anything like the past and we all need to brace ourselves to adapt to how this cycle and subsequent ones will unfold.
In conclusion,
I am not by any means suggesting you shouldn't pay attention to historic crypto data but my emphasis here is that don't over rely on them because no two cycles are the same. A typical example is the 2016/2017 and 2020/2021 cycles, the underlying factors that fuel each cycle was different and this cycle will not be an exception.
