Market Analysis on August 17, 2025

In the past two days of retracement and consolidation, there has been an interesting phenomenon. Last week, the price rose steadily, and when the ETH price broke through $4400, holders were very excited; conversely, in the past two days, when the price pulled back from $4788, investors appeared very frustrated. Why is it that the same price of $4400, with only a few days apart and no change in positions, causes spot investors to experience such a huge psychological shift due to a mere decrease in unrealized profits? In psychology, there is a professional term called "psychological anchoring". The previous $4400 was anchored to the low point of $1400 or the cost price of the position, making people feel "they have made a lot of money", hence they are happy. The latter $4400, however, is anchored to $4788, resulting in profit-taking, which makes people feel "they are losing money", leading to frustration instead. This psychological phenomenon is very important in investing; if we can correctly identify and utilize it, it can assist us in taking profits or avoiding pitfalls.

First, let's talk about auxiliary take-profit. A few days ago, I mentioned a point: once the market shows obvious risk signals, large-scale withdrawal can occur, such as liquidation volume exceeding 1.5 billion or even 2 billion USD, or the price breaking below the MA120 daily moving average. But as a fan pointed out, these are often lagging indicators; when the data is abnormal, the price often has already fallen. At this point, we need to avoid strong psychological anchoring. For instance, when it dropped from 4788, if in your judgment system, the risk is extremely high, then you should significantly reduce your position at 4400.