What's your thought about this?
I have a scenario for this topic:
John bought Bitcoins when at the price of $18,000 and decided it to HODL.
But after he bought some Bitcoin, the price is starting to decrease, from $18,000 to $10,000 and to $4,000.
So,he already lost his money for almost 50% and he decided to gamble his Bitcoins;
Here's the thing, if you are John and start to gamble, would you bet with high risk (betting with huge amount, betting in low chance of winning, etc)?
Since if it was me, I already lost a lot when I even bought those Bitcoins at $18,000 so the best thing I can do is to gamble it and earn more bitcoins to decrease my loss or breakeven it.
What can you say about this? Or maybe you already experienced this.
The risk is really high when in a bear market compared to when in bull episode and its a gradual one depending on the price point where the risk is to be taken. Using this scenario, what would inform the risk the individual would take would be the quest to get back to the starting point which is the $18k which means the individual would take more risk when the price is $8k when the target is $18k compared to when price was $15k or $12k. The reason for that is because according to human nature, when you get to a point when returns is no longer the option, maintaining the capital would be the best alternative which is what a rational human being would do in this scenario.