bias library
Anchoring
You over-weight the first number you saw — usually your entry price or an all-time high.
Tversky and Kahneman (1974) demonstrated that even random numbers anchor subsequent estimates. In crypto, the anchors that dominate your decisions are typically: your entry price, the asset's all-time high, and the targets you read on launch.
What it looks like in crypto
- ●"I won't sell below my entry." The entry price is information about your past, not about today's market. The market doesn't know it.
- ●"BTC was 100k once, so it'll get there again." All-time high anchoring. Past extremes warp the sense of what's plausible from current price.
- ●"The analyst said $5,000 ETH." An external anchor borrowed from someone who has a different time horizon and risk tolerance than you.
- ●You decline to buy something at $200 that you would gladly have bought at $180 yesterday — even when nothing fundamental changed.
- Ask: "If I had just discovered this chart today, knowing nothing about its history, would I enter at the current price?" If no, your anchor is in the way.
- Build your thesis from inputs that are NOT prices: thesis logic, on-chain metrics, addressable market, time horizon. Then check price.
- When the all-time high comes to mind, write it down. Then ask what would have to be true for the chart to retrace there. Naming the requirement loosens the anchor.
- For analyst targets: treat them as one input among many, not the answer. Look at how often the same analyst's last five targets played out.
Worth knowing
You cannot delete anchors, but you can notice them. The trader who knows their entry price is in their head — and corrects for it — is already half-immune. The trader who insists they "wouldn't sell below entry on principle" has named the cage and walked back in.
Tversky & Kahneman (1974). Judgment under Uncertainty: Heuristics and Biases. Science, 185, 1124–1131.
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