Overconfidence: The Silent Killer of Every Bull Market (Crypto Edition)
Everyone loves to say greed kills portfolios. Personally, I think it’s overconfidence. That whisper that says, “2x is nothing… wait for 20x.”
The mindset that convinces people every altcoin is the next Solana.
The belief that the rules of maths, dominance, cycles, liquidity, and probability don’t apply to you.
In every cycle, more people lose money in the bull market than in the bear market, not because prices fall, but because they genuinely believe they’ll make more money than Bitcoin, the benchmark of the entire asset class.
Let’s break down why overconfidence quietly destroys portfolios, how it shows up, and why simple investing usually beats clever hacks.
Why Overconfidence Happens
Overconfidence isn’t random; it’s triggered by two things:
1. You’ve been consistently winning
A few good trades convince you you’re the exception. You start assuming:
- You’ll always catch the top
- Every pullback is “just noise”
- You’re a long-term investor… while holding a dying altcoin
- Probability doesn’t apply to you
And because crypto feels fast, people assume the rules are different. They’re not.
2. You believe “this time is different”
This is the classic trap that leads people into projects with flashy websites, hyped influencers, and no fundamentals.
You ignore dominance.
You ignore liquidity.
You ignore emissions.
You ignore every rule you learned in the bear market.
And suddenly you realise: you’re not investing you’re gambling with confirmation bias.
Simple Investing Still Works
On the NASDAQ or S&P 500 chart, investing looks simple:
- Buy quality assets
- Buy them far away from all-time highs
- Dollar-cost average
- Sit still
That’s how people build wealth in traditional markets.
But in crypto, everyone wants to optimise everything.
Instead of stacking Bitcoin (the asset that actually performs over cycles), people chase 100 microcaps because someone with an anime PFP mentioned it in a Discord server.
It used to work years ago.
Now? The power has shifted entirely to Bitcoin, and liquidity has evaporated from the altcoin market.
The 3x, 4x, 5x Problem
In the stock market, a 5x makes you a legend.
In crypto, people treat it like a failure.
Meanwhile:
- Nvidia went parabolic
- Meta recovered massively
- MicroStrategy exploded
- Bitcoin quietly did an 8x during the same window
Yet people expected altcoins in 2025 to repeat the magic of 2023–2024… even though the entries happened months earlier.
This is what overconfidence does:
It convinces people that the gains will continue simply because they want them to.
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A Real Example: Zcash
A year ago, nobody cared about Zcash.
Now it pumps, and suddenly everyone wants it.
But it’s still 95% down from previous highs.
So why didn’t people buy it at the bottom?
Because overconfidence tells them something new will 100x instead.
Same story every cycle.
Influencers Fuel the Illusion
Every cycle, the loudest voices:
- call for $3k Solana
- $20k Ethereum overnight
- $500k XRP
- $800k Bitcoin this cycle
And people believe it…
Because it confirms what they want to be true.
Look back at the April 2024 predictions, Solana had already done a 26x, yet influencers were calling for another 10x+ as if cycles have no limits.
People held bags because of predictions, not reality.
Profit-taking became “illegal”.
And as usual, the late buyers became liquidity exits.
Altcoins Are a Different Game Now
Altcoins today are nothing like they were in 2020 or 2017:
- Liquidity is lower
- Emissions are higher (inflation)
- Teams selling tokens constant
- Buyers sell at every pump
- Bitcoin absorbs most inflows
Look at Polkadot: world-class tech, grand narrative…
But an 18% annual inflation killed it.
There isn’t enough new liquidity to support hundreds of projects anymore.
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The Echo Chamber Effect
Crypto is tribal.
YouTube, X, Discord they all form bubbles where:
- You only hear people who confirm your bias
- The loudest influencers get rewarded
- Criticism gets punished
- Unrealistic predictions spread like wildfire
Influencers who take profits or show caution get attacked.
Influencers who hype unrealistic targets get rewarded.
And this fuels, you guessed it, more overconfidence.
The Solution: Keep It Simple
A few principles will save you:
1. Take profits at realistic multiples
A 3x is great.
A 5x is incredible.
Stop acting like it’s not.
2. Keep Bitcoin as your base
Altcoins shouldn’t be your benchmark.
Bitcoin should be.
3. Use risk-on / risk-off signals
Dominance matters.
Liquidity matters.
Probability matters.
(You can use my free dominance indicator on TradingView to help with this.)
4. Grow your wealth, not your ego
You only need to get wrecked once to ruin years of progress.
My Personal Experience
In 2020, I bought:
- Polkadot on the floor
- Zilliqa on the floor
- Cardano on the floor
- VeChain on the floor
Insane gains.
In this cycle?
The only big winners were Bitcoin, NEAR and ROSE.
Everything else underperformed.
I held onto some narratives too long because I expected 2020-style returns again.
That overconfidence punished me and taught me to be stricter with my plan.
Every time I ignored my rules, the market slapped me.
The Cycle Rewards the Humble
Every cycle proves this:
- Bitcoin rewards patience
- Altcoins punish impatience
- The ego punishes everyone
Most people will lose more money in the bull market than in the bear market because they believe they’re above average.
You don’t need to be special.
You need to survive.
Overconfidence kills more gains than the bear market ever will.
