The psychological black hole behind the big pump of tokens: Why are 90% of people trapped in the deadly cycle of price belief?

Do you still believe in 'Up Only'?

Written by: hitesh.eth

Compiled by: Luffy, Foresight News

People's understanding of token issuance stems from evolutionary trends. In cryptocurrency, evolutionary trends often carry the memory of past profits. What happened in the past is not only important; the patterns that worked in the past are crucial. Therefore, most participants are not genuinely betting on the fundamentals but are attempting to recreate moments that were once profitable, subconsciously chasing historical peaks by repeating the same behaviors.

In this market, there are participants from different time points:

• A part of them are "veteran players" from before 2018;
• Most are groups that entered after 2020;
• There are also on-chain users who joined in the past three years.

These groups have different understandings of token issuance based on their respective evolutionary tendencies. This means that their emotional interpretations and expectations of the same event are completely different.

• Participants before 2018 still seek certainty, valuing roadmaps, token economics, practicality, and vision. They hope the team provides proof of work and actual progress, preferably with real income. They are the natives of ICOs, having witnessed the changes in the cycle, and tend to favor projects that are continually evolving.
• Participants after 2020 seek shortcuts, most of whom still hold the tokens "fed" by KOLs. Their mindset is rooted in wishful thinking; they may not care about the substance of the project, only focusing on whether someone will take over at a higher price. Patience is limited, expectations are limitless.
• Recently, new users on the blockchain are chasing free profits or quick thrills. They act aggressively and swiftly, participating in all mining activities, following every trend, hustling for points, and attempting to hype every hot topic. However, their expectations are too high; even earning a few thousand dollars seems insufficient, ultimately leading to losses due to over-trading, with most becoming deeply entangled and unable to extricate themselves.

These three types of participants have three different "psychological spaces", which I call intersubjective space.

In cryptocurrency, intersubjectivity is not an abstract philosophical concept, but a real existence. It refers to the shared beliefs of multiple people, and this "collective fiction" temporarily becomes reality through the joint actions of all.

In the cryptocurrency field, these common beliefs drive the development of the market.

The thoughts of the participants in these spaces are intersubjective. They recognize each other, hype each other up, and support each other's viewpoints. This intersubjectivity creates a powerful community, a tribal force, that acts as a positive or negative catalyst for the tokens.

People in the spaces between these entities got involved early on. They took on more risks, invested more energy, and believed in the story before it became a reality.

When the tokens are delivered, they invest emotions. They are not just holding the tokens; they themselves become the tokens. They are the community. They become the spokespersons for the projects on social media, attracting attention, creating memes, drawing in others, and continuously expanding the intersubjective space.

Hyperliquid is a typical case: early believers form a strong intersubjective group, receiving rewards through large-scale airdrops, and the airdrops themselves become evidence of "faith working," further fostering more belief and creating a cycle. A similar logic applies to Memecoins like BONK, WIF, and POPCAT, which are all primarily driven by intersubjective energy.

In cryptocurrency, price is narrative, it is a leading indicator.

If the price rises, more people will join. But before that, someone needs to believe that the price will rise. This is where inter-subjective groups come into play.

They took action before the results. They became the cause. These believers did not act in isolation; they acted through interpersonal collaboration. They promoted together, posted together, fought together, and collectively constructed a shared reality.

When others start to join, they will see the price as confirmation. The price is no longer just a number, but a signal. This signal will cycle back and forth, igniting more confidence, more buying, and more price action. This is reflexivity.

The reflexivity of cryptocurrency means that price affects belief, and belief in turn affects price. This is a feedback loop where perception and valuation influence each other.

Specifically manifested as:

1. People buy tokens due to price increases;
2. Price increase becomes a proof of success;
3. Successfully converted into marketing materials;
4. Marketing shapes the narrative;
5. Narrative attracts more buyers;
6. More buyers drive prices further up.

But the "cause" of the price surge is far more complex than the "effect":

• The drive of Memcoin may stem from culture;
• DeFi projects may originate from revenue;
• AI agents may stem from technology.

Their common ground is: it starts with the shared beliefs of a few and ends with the buy-in of the majority.

Those who enter during the reflexive phase usually buy "dreams" rather than logic, and they become the "exit liquidity" for those entering during the intersubjective phase.

At this point, the game is asymmetrical.

Participants in the two stages (the intersubjective stage and the reflexive stage) manipulate information, create narratives, distort facts, and expand beliefs to align others with their version of reality.

As time went on, multiple realities formed around the same symbol. Each group's beliefs are slightly different. These are all perceived realities, micro-echo chambers of belief. Each group has different reasons for holding different views, expects different outcomes, and withdraws at different moments. These micro intersubjective spaces create turbulence, fear, greed, and often chaos.

Most people in these micro-realities will fall into extreme greed, forgetting their initial intentions for entering and only remembering the possible losses. When the bubble bursts, they not only lose money but also lose faith, collapsing in the space they once celebrated.

The true beneficiaries of token price discovery are those early coordinators (who shape the token price through shared beliefs, behavioral resonance, and collective cooperation). However, even for them, profits can only be realized when the token price remains significantly above their expectations for a long time, allowing them to exit with confidence.

Ultimately, price discovery is not a chart event, but a coordination event. It is shaped by how humans perceive value, believe in stories, and how they synchronize actions with others.

So, you must always be aware:

• Which stage you are in;
• Participating in what kind of "reality";
• What kind of understanding do you have when you believe the token will rise?

The clearer your understanding of your own psychological foundation, the better results you can create for your positions.