On psychological traps behind the fantasy of “I should’ve bought the bottom with 100x leverage”Over the weekend just as many peeps out there, I kept asking myself the same question.
“What if?”
Especially once the market sort of bounced back.
Then I decided to look at what behavioral scientists said about similar situations with stock traders. Turns out, Prospect Theory is indeed applicable to the myths and psychological reasons behind the whole “Coulda - shoulda - woulda” of crypto trading.
“I Would’ve Bought the Bottom” — No, You Wouldn’t HaveThe market nuked and bounced in a matter of minutes.
And now comes the chorus:
“Bro if I had just longed the bottom with 50x…”
“It was so obvious in hindsight.”
“Could’ve printed life-changing money.”
But you didn’t.
Let’s talk about why that fantasy is almost never true — not because you’re dumb, but because you’re
human. And humans are wired to remember selectively, predict poorly, and misjudge both past and future pain.
The Fantasy Timeline vs. The Real OneIn the fantasy timeline, you wait patiently, emotions in check, spot the exact ATL, size your position perfectly, crank the leverage, and ride a clean bounce straight into early retirement.
In the real timeline, here’s what happens:
- You think it’s the bottom
- You enter too early
- You get liquidated
- You repeat this 2–3 times
- You either give up or have no capital left by the time the real bottom arrives
(certain variations are expected here but you get the jist)
So why do so many people still believe they would’ve nailed it?
1. Retrospective SimplicityThe mind compresses chaos.
When you look back, the chart looks obvious. But in real-time? Every bounce looks like
the bounce. Every dip may feel like the bottom.
In behavioral science, this is more than just hindsight bias — it’s retrospective determinism: the illusion that the past was orderly, predictable, and fit into a clear narrative.
“Of course it bounced there. It was the obvious liquidity sweep.”
No. It feels obvious because it already happened.
2. Counterfactual Rehearsal LoopsYour brain doesn’t just recall what happened — it rehearses what didn’t.
“If I just bought at the bottom…”
“If I held through the pain…”
This isn’t learning — it’s counterfactual rumination, and it wires you deeper into regret, not clarity.
Studies show that people will re-live near-misses more vividly than actual outcomes — like traders who almost went long at the bottom feel worse than those who didn’t even notice the dip.
That’s not insight. That’s self-punishment disguised as analysis.
3. Time Compression & Emotional AmnesiaYour memory of how fast it all happened? Wrong.
Your sense of how stressed you were? Also wrong.
In high-volatility moments, time dilates emotionally — you feel like you’re in the market for days when it's only been minutes. Every candle is a threat. Every bounce is fake. Your heart rate tells you to exit now.
But weeks later, you only see a clearer picture. The tension is gone. Your body forgets the fear. And so you assume you could’ve calmly executed the perfect long.
You weren’t calm. You were cooked.
4. Illusion of Control & Roleplay BiasMost people think they’re the “main character” of the trade. They imagine the win as if they were in control of it — despite all evidence to the contrary.
Psychologists call this the illusion of control — overestimating your influence over outcomes driven by luck, timing, and volatility.
But in crypto, it often gets worse: roleplay bias — mentally inserting yourself into someone else’s successful trade, as if you would’ve made the same decisions with the same conviction.
You didn’t ride it. But your brain thinks you did.
5. Post-Traumatic RationalizationThis one cuts deep.
After a drawdown, we can’t just say “I panicked.”
Instead, we rewrite the story: “I was being careful.”
We justify the early exit. We justify the late entry.
CO 
