Why Do So Many People Lose Money in Crypto? 😥☠️

Here's the Truth You Need to Know! 🤔

It’s no secret that crypto runs in cycles, with bull runs sparking wild gains every four years, but why do so many still get burned despite knowing the pattern? If you’re wondering why losses persist, you’re not alone. Let’s break it down.

1. The Anatomy of a Crypto Bull Run Cycle

Crypto’s famed bull run cycle generally spans about four years: the first three locked in a bear market and the last one exploding into a bull run. Historically, these cycles have stayed remarkably consistent:

2014-2018

Bear: 177 Weeks

Bull: 34 Weeks

Total: 211 Weeks (4 years and 2 weeks)

2018-2022

Bear: 157 Weeks

Bull: 47 Weeks

Total: 204 Weeks (3 years, 11 months)

2022-2026

We're still in the game, but with no new all-time high (ATH) confirmed and defended, we remain in bear territory, riding out the wait for the next big push.

2. The Psychology of a Market Cycle

If you thought the bull run cycle was intense, brace yourself for the psychological ride. Emotions form distinct phases that investors go through, often steering them into losses despite market trends.

Red Phase: Complacency, Anxiety, Denial, Panic, Capitulation.

Right after a new ATH, prices start to dip. At first, you think it’s just a pullback. As the drops persist, anxiety creeps in, but you hold on. Then, when you’re down 90%, panic hits. You finally sell, capturing a big loss—welcome to capitulation.

Yellow Phase: Anger, Depression, Disbelief, Hope.

Prices stabilize. But you’re still angry, maybe even depressed, and refuse to trust any recovery. After a minor rally, hope flickers, but you’re hesitant.

Green Phase: Optimism, Belief, Thrill, Euphoria.

The price breaks the previous ATH, and suddenly, the rally feels real. Excitement builds as prices soar—you’re back in! Euphoria takes over, but too often, it blinds you to the next cycle's inevitable turn.

3. The Two Elements That Create the Perfect Storm

Now, combine these two factors—the predictable cycle and the unpredictable psychology. Even with a solid understanding of the bull run pattern, emotions can derail the best-laid plans.

🟥 The Red Phase

The thrill of hitting a new ATH quickly turns into complacency. As the price dips, you wait, thinking it’s just a pullback. Anxiety takes over, but you don’t sell, assuming it’ll recover. But when the floor finally drops out, panic sets in, and you capitulate, locking in major losses.

🟨 The Yellow Phase

With prices trading sideways, anger and regret build. Any new rally feels like a fluke—until it’s not. Hope edges in as prices rise, but after a recent sting, you’re cautious, sometimes missing the momentum altogether.

🟩 The Green Phase

A new ATH is finally breached, optimism returns, and the rush to buy sets in. Belief builds, followed by thrill and pure euphoria. But without a clear exit plan, you ride the wave until the cycle begins to repeat, catching you off guard once again.

In the end, people lose money in crypto because they get swept away in the cycle, ignoring when to cash out. Staying grounded, having a plan, and resisting emotional highs and lows are the real tools for success.

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