Why does buying the dip get you trapped? Chasing the price is the top?

This issue is essentially about market sentiment and capital flow.

Why is chasing the price the top?

Phase One: When the market is down
Most people will wait and think that it will continue to drop. At this time, smart money starts to accumulate in batches. Retail investors' first reaction to the rebound is "trap", missing the best buying point.
Phase Two: Continuous Rise
When the price breaks through a certain psychological barrier, some savvy retail investors begin to believe in a trend reversal. At this point, entering the market is actually already at a middle position.
Stage Three: Market Frenzy
Various voices of "the bull market is here" have emerged, with the last retail funds entering the market. At this point, market liquidity reaches its peak, and smart money begins to exit in batches.

Because when the last bear is convinced to enter the market, there are no new buyers left.

Why is buying the dip always trapped?

Phase 1: When the price rises and then falls
FOMO emotions, using leverage to buy "cheap chips", acting as the exit liquidity for smart money.
Phase Two: Continue to break the level
Continue to build positions to average down costs, buying more as prices drop. "Spot is not afraid" "The altcoin season is coming, the last wave of shakeout is approaching"
Stage Three: Numb from the Drop
Believe the bear is here, get rid of positions, the potential sell-off in the market is exhausting, a true bottom is emerging.

Because most people act when they "feel okay", hurriedly becoming the sellers distributing liquidity. The real bottom often appears when everyone is in despair, with no more sell orders left.

When you don't want to buy the dip, or when you don't have money to buy the dip, that's when it really is the bottom😂