Why is it that when the market drops, people are afraid to buy in but are willing to cut losses?
From a psychological perspective, it primarily stems from the "loss aversion" phenomenon—people perceive the "pain of loss" to be 2.5 times greater than the "joy of gain," so when the market falls, individuals experience more pain and worry about further losses;
Secondly, there is the "herd mentality"—as more people become bearish and cut losses during a downturn, it’s easy to be influenced by negative emotions and constantly doubt one's own judgment;
Finally, there is the "anchoring effect"—the already pessimistic emotions during a decline will more easily lead to looking for even lower historical prices as benchmarks, believing that prices will drop even further.
Therefore, those who shout for 60,000 to go all in look towards the even lower 40,000, and not only do they not buy in, but they have even cut losses.
From a psychological perspective, it primarily stems from the "loss aversion" phenomenon—people perceive the "pain of loss" to be 2.5 times greater than the "joy of gain," so when the market falls, individuals experience more pain and worry about further losses;
Secondly, there is the "herd mentality"—as more people become bearish and cut losses during a downturn, it’s easy to be influenced by negative emotions and constantly doubt one's own judgment;
Finally, there is the "anchoring effect"—the already pessimistic emotions during a decline will more easily lead to looking for even lower historical prices as benchmarks, believing that prices will drop even further.
Therefore, those who shout for 60,000 to go all in look towards the even lower 40,000, and not only do they not buy in, but they have even cut losses.
