According to Compounding Quality (@QCompounding), Charlie Munger warns that the most severe mistakes in financial markets occur when multiple cognitive biases—such as social proof, incentives, and denial—combine, a phenomenon he terms 'Lollapalooza effects.' For crypto traders, recognizing these combined biases is critical, as they often lead to herd behavior, irrational price surges, and sudden crashes, impacting trading strategies and risk management (Source: Compounding Quality on Twitter, June 2, 2025). Understanding these effects helps traders identify unsustainable rallies or panics in the cryptocurrency market and adjust positions accordingly.