Predicting the next actions of most retail investors on the forum

Most retail investors are experiencing a full bull-to-bear market cycle for the first time, and their operating patterns can be clearly seen from the emotions and discussions in the forum.

Typical mentality when transitioning from bull to bear: denial of reality, fantasizing about rebounds, buying more as prices fall.

After the market peaks and starts to turn downward, retail investors are still basking in the afterglow of making money, generally thinking “this is just a correction,” “the fundamentals haven’t changed,” or “institutions will pull it back up.” The discussion sections are full of calls to hold and buy the dip.

At this point, retail investors generally go through three steps:
Step one: Averaging down and buying more. In the early stages of the drop, they frantically average down, even adding leverage, treating lowering their cost basis as a belief.
Step two: Holding on without selling. After breaking key support levels and going from unrealized gains to unrealized losses, they still refuse to cut losses, insisting that “as long as I don’t sell, I haven’t lost.”
Step three: Blaming external factors for the drop. Everything becomes a reason: FUD, market manipulation by whales, institutions running away, macro trends... the only thing they won’t admit is that the trend has changed.

It’s not until BTC drops by 50%-70%, altcoins go to zero, and liquidity dries up, that retail investors finally realize in despair “the bull market is over.” But by then, they are usually deeply trapped, unable to move, and may even sell at the bottom.

Next, many newcomers who have never experienced a full bull-bear cycle are likely to follow this script. Let’s leave it to time to prove.