The decision to Cut Loss made in the late night is mostly rooted in that unrealistic sense of luck during the day.

A trader reached out to me in the early morning, saying that he originally had 20,000 USDT in his account, but now there's only 3,000 left. He had been staring at the K-line chart all night and was about to break down. I didn't offer any comforting words; instead, I asked a hard-hitting question: "When it fell below your set stop-loss level, why didn't you execute the sell?"

His answer was almost a textbook lesson. It started to drop by 2 points, and he thought this was a "normal adjustment, it will rebound soon"; when it fell by 5 points, he fell into the mental trap of "I've already lost so much, selling now is too unprofitable"; by the time the drop exceeded 60%, looking at that green account, his fingers were trembling and he couldn't press the sell button.

Does this story sound a bit familiar? In fact, every bear market repeats this kind of scenario.

I have also fallen into such a pit myself. During that round in 2020, I chased high and bought a certain small coin, investing 15,000 USDT. When it dropped by 5%, I was still self-affirming, "This pullback is just the perfect opportunity to get in." When it dropped by 10%, I even debated in the community that the project's fundamentals were fine. It wasn't until the drop approached 70% and my account only had a little over 4,000 USDT left that I finally pressed the sell button, trying to suppress my pain.

It was only later that I understood that the obsession with "waiting for it to rebound" is essentially a gambler's form of self-hypnosis. The crypto market will never show mercy just because you "lost badly enough."

The three psychological black holes that usually cause people to go from profit to liquidation are:

**Gambler's Fallacy**. When the market just starts to adjust, it always treats small fluctuations as "normal technical retracements", infinitely amplifying random rebound signals, and ultimately misses the best stop-loss window.

**Sunk Cost Fallacy**. Having lost so much already, selling would mean accepting the loss; not selling instead allows for self-comfort and the possibility of turning things around—this logic is called "all in" at the casino and "suicidal bottom fishing" in trading.

The deeper the night, the deeper these psychological traps become. Fatigue, fear, and hope mix together, turning into the last straw that breaks the camel's back. Sometimes, exiting in time is not a failure in investment, but a prerequisite for continuing to play the game.