What Is the Anchoring Effect in Crypto? Why Do We Always Want to Wait for the Price to Return to Our Entry?
The anchoring effect is when your brain treats your entry price as the sole benchmark for right and wrong, causing every decision you make – waiting to break even, refusing to cut losses, hesitating to chase rallies – to be held hostage by that number. If you want to break free, the core action can be summed up in one sentence: when making a decision, pretend you never bought this coin at all, and only ask yourself, "Is this price worth buying at right now?"
A leading global cryptocurrency platform,suitable for both beginners and experienced traders.
New user benefit: 20% off trading fees upon registration!！
Prerequisites
Before you start "breaking the anchor", confirm two things:
You have your portfolio records and current prices at hand – don't rely on memory, look at real data.
You currently hold at least one position that is sitting at an unrealized loss – if not, the anchoring effect hasn't trapped you yet, but reading this article can help you avoid it in the future.
First, Recognize How Anchoring Manifests in Your Behaviour
What to do: Check whether you are being hijacked by your entry price.
How to do it:
Compare yourself against the following three points. If even one applies to you, the anchor has already taken hold:
Waiting to break even: The price drops, and you tell yourself, "I'll sell when it gets back to my cost." This isn't analysing the market; it's playing a game of pride with your entry price.
Reluctant to cut losses: You feel that "selling at a loss makes it a real loss; holding on leaves at least some hope on paper." Wrong – the difference between a paper loss and an actual loss is simply the moment you actively hit the "sell" button.
Afraid to buy on strength: The price has risen, and you think, "It's too expensive compared to before, I just can't bring myself to buy." But your entry price may have absolutely nothing to do with the asset's true current market value.
When you have done enough: You can honestly say which point applies to you. Admitting you are anchored is the first step to breaking free.
Common reason for failure: Mistaking "waiting to break even" for "long-term investing". The two are fundamentally different. Long-term investing is based on your judgement of the asset's value, whereas "waiting to break even" is based solely on your entry price – a number the market doesn't even know exists.
Use "Zero-Based Thinking" to Disrupt the Anchor
What to do: Whenever you are about to make a decision because you want to "get back to breakeven" or you "can't bear to sell", stop and ask yourself one specific question.
How to do it:
Ask yourself: "If I didn't own this coin right now, would I buy it at today's price?"
If the answer is "Yes" – continuing to hold is rational. Your judgement is based on current value, not on a past price.
If the answer is "No" – the only reason you are holding is the anchoring effect. Standard action: reduce or close the position immediately.
When you have done enough: You have applied this test to at least one holding and followed through on the answer. Don't just "think about it and leave it at that" – actually do it.
Remove Your "Cost Price" from Your Trading Interface
What to do: Eliminate the easiest anchor for your brain to grab – your entry price.
How to do it:
Case A / Using trading software: Most exchange portfolio screens default to showing "Average Cost" or "Entry Price". If there are customisation settings, turn this off or hide it, keeping only "Current Price" and "Position Size".
Case B / Using an Excel tracking sheet: Hide the "Cost Price" column and only keep "Current Price" and "Quantity". You don't need to see that entry price every day – it's enough to know where it is; you don't need to stare at it constantly.
When you have done enough: On your trading screen or tracking sheet, the cost price is not the first thing you see. This isn't about forgetting the price; it's about no longer using it as your decision-making benchmark.
Risk note: Some may ask, "How do I calculate PnL without seeing the cost price?" PnL is calculated based on total capital deployed versus total current market value. Computing it periodically (e.g. once a month) is sufficient; you don't need to look at it every day.
Replace the "Fake Anchor" with a "Real Anchor"
What to do: Replace "How much did I pay for it" with "How does the market value this coin right now?"
How to do it:
The real anchor is not your entry price, but the coin's current fundamentals and market pricing logic:
For Bitcoin / Ethereum: Look at on-chain data (active addresses, long-term holder trends), the macroeconomic environment, and ETF flows.
For altcoins: Look at project development progress, community activity, and tokenomics (unlock schedules, circulating supply).
For meme coins: Look at community sentiment, KOL activity, and exchange listing news – these are what actually anchor their pricing.
When you have done enough: You have a "decision-making checklist" at hand – when deciding to buy or sell, you look at the information on this checklist first, not your cost price.
A leading global cryptocurrency platform,suitable for both beginners and experienced traders.
New user benefit: 20% off trading fees upon registration!！
Anchoring Effect Self-Check Table
| Symptom | Quick Self-Check | Action to Break It |
|---|---|---|
| Waiting to sell at breakeven | Does your sell decision depend solely on "getting back to price XX"? | Use zero-based thinking and ask: "At today's price, would I buy it?" |
| Unable to cut losses | Are you refusing to sell because of an "unrealized loss"? | Recognize the difference between paper loss and actual loss; judge based on "Would I buy it now?" |
| Afraid to buy on strength | Are you unwilling to buy because "it's more expensive than before"? | Accept that your original entry price is irrelevant to the current market; decide based on present information |
| Single-minded decision basis | Do you evaluate a trade only by your "cost price"? | Build a list of "real anchors": fundamentals, on-chain data, capital flows |
After completing these four steps, you already know how the anchoring effect trapped you and you've taken concrete action to break it: you've applied the zero-based thinking test to at least one holding, and your trading screen no longer shows the cost price at first glance. The next step is not to immediately buy or sell, but to embed zero-based thinking into your trading process – every time before you decide to hold or open a position, first ask yourself that question: "If I didn't own it now, would I buy it?" Turn this question into a habit, and the anchor will never be able to tie you down again.
