Bitcoin hitting $110,000 is undeniably a milestone. Headlines are shouting “bull run,” and crypto Twitter is almost vibrating with hopium and impossible optimism. Before you go and remortgage your home to purchase a whole bunch of them, let’s hit pause. This euphoria is precisely why I'm concerned. This isn't just about technical analysis or on-chain metrics; it's about us, about the often irrational, easily swayed human psyche.

Greed Is A Hell Of A Drug

We're wired for pattern recognition. When prices increase, we immediately expect them to continue increasing. That’s FOMO in action – fear of missing out. It’s the same impulse that fueled the dot-com bubble and the tulip mania. And just now, the Fear and Greed Index, currently at a neutral sounding 55, is yelling yellow. It's trending towards greed.

Think about it. Honestly, how many conversations have you found yourself in lately where no one was patting themselves on the back for their recent windfalls in crypto. After all, how many times have you seen a Bitcoin prognosticator confidently predict Bitcoin to $200,000 by year-end. This is confirmation bias – we look for things that reinforce what we already believe, while dismissing all evidence to the contrary. In a bull market, that translates to the deafening sound of only hearing the bullish voices.

This reminds me of something completely unrelated: the Milgram experiment. Remember that? Individuals were surprisingly willing to deliver very harmful or even fatal electric shocks to other individuals just because an authority figure instructed them to do so. Though the experiment uncovered the dark side of obedience, it shone a light on our natural tendency to fall prey to groupthink. With social media’s tendency toward herd mentality, the crypto market may be the largest hotbed of 21st century groupthink bandwagoning around. We don’t realize that all of our competitors are buying, so we think that’s the winning play.

Social Media Echo Chambers Erode Sanity

Social media is a double-edged sword. While it can democratize knowledge, it can worsen the signal-to-noise ratio. Influencers like Ash Crypto, with their giveaways, and traders like James Wynn, bragging about their 40x long positions, are not your friends. As such, they are incentivized to push out a bullish narrative, no matter what the risks may be.

Consider the above questions and ask yourself, are you taking investment actions due to your rigorous analysis, or are you just going with the flow (i.e. How are you supposed to think critically at all if every time you open your Twitter account you just see “number go up” memes.

Now, look, I’m not saying that Bitcoin doesn’t go higher. The jump in trading volume indicates they are highly bullish on the market. In the meantime though, its comeback from the Trump/Musk kerfuffle shows that it must have a pretty strong base of hodlers. This resilience is a trap – and the cost is high. It lulls us into a dangerous complacency. We think an upcoming dip is still a temporary blip on our journey to the moon.

The Dangerous Truth Revealed

Here's the dangerous truth: unchecked bullish sentiment can lead to a catastrophic market correction. When everyone is optimistic, who’s left to sell? When the music stops, the ones left standing without a chair will be individual retail investors. They're the ones who got in at the peak.

  • Volatility spikes: The higher it goes, the harder it falls.
  • Excessive leverage: A small dip can wipe out heavily leveraged positions.
  • Scam proliferation: Bull markets attract scammers like flies to honey.
  • Retail investor carnage: Those late to the party often get burned the worst.

Think about the average person. They aren't seasoned traders. They’re reading about Bitcoin from their friends, on the news, and watching their neighbors apparently get rich overnight. They don't understand the risks involved, and they're especially vulnerable to FOMO.

Bitcoin's surge to $110,000 is exciting, yes. And, no, I am not saying Bitcoin will not make it. But it’s important to keep in mind that markets are not entirely rational—they are heavily influenced by human emotions. At present, those emotions are weighted heavily in favor of greed.

Don’t be a sheep. Be a critical thinker. Question the narrative. Understand the risks. Protect yourself. The market doesn't care about your feelings. It only cares about supply and demand. And then, when demand dries up, the price will collapse.

  1. Do your own research. Don't rely on social media hype.
  2. Manage your risk. Don't invest more than you can afford to lose.
  3. Use stop-loss orders. Protect yourself from sudden price drops.
  4. Diversify your portfolio. Don't put all your eggs in one basket.

A Call For Critical Thinking

The future of Bitcoin is uncertain. One thing is certain: the only way to navigate this volatile market is with caution, discipline, and a healthy dose of skepticism. Don’t let the euphoria distract you from an even more dangerous reality.

Don’t be a sheep. Be a critical thinker. Question the narrative. Understand the risks. Protect yourself. The market doesn't care about your feelings. It only cares about supply and demand. And when the demand dries up, the price will plummet.

The future of Bitcoin is uncertain. But one thing is certain: the only way to navigate this volatile market is with caution, discipline, and a healthy dose of skepticism. Don't let the euphoria blind you to the dangerous truth.