According to Compounding Quality (@QCompounding), denial in trading psychology—where traders ignore negative realities with thoughts like 'It's not that bad'—often leads to poor decisions and delayed market reactions. This behavioral bias can cause crypto traders to hold onto losing positions longer than rational analysis would recommend, increasing the risk of deeper losses during market downturns (source: Compounding Quality, Twitter, June 2, 2025). Recognizing and counteracting denial can help traders react swiftly to market signals and improve risk management in volatile cryptocurrency environments.

According to Compounding Quality (@QCompounding), the 'liking bias' can significantly influence traders in the cryptocurrency market, leading them to trust and follow advice from individuals they like, even if the information is incorrect. This bias can result in poor trading choices or ignoring valuable insights from less-liked sources. Traders must recognize and actively manage this bias to make objective decisions, as emotional influences can have direct impacts on portfolio performance and risk management (Source: Compounding Quality, Twitter, June 2, 2025).

According to Compounding Quality (@QCompounding), authority bias can lead traders to make poor decisions by blindly following influential figures, even when evidence suggests otherwise (source: Twitter, June 2, 2025). This psychological bias is particularly relevant in cryptocurrency markets, where influential voices on social media can sway trading volumes and price action. Understanding authority bias is crucial for traders aiming to make independent, data-driven decisions and avoid herd mentality that often results in volatile market swings.