A thought I've pondered for many years—the idea of the "Herd Effect" might be overstated.

We often say that traders follow the crowd, retail investors are blindly following, and the market is irrational, as if everyone is a grasshopper on a single rope. But what is the real situation? By carefully examining trading data and on-chain behavior, people's decision-making logic is actually quite diverse. Some base their decisions on technical analysis, others look at fundamentals, some rely purely on capital management, and some have a gambling mentality. These different decision-making approaches, when they come together, may look like collective action, but in reality, they are each acting independently.

Just like in the crypto market, some whales are building positions, some are arbitraging, and others are stop-lossing—on the surface, they are all buying or selling, but their motivations are completely different. If it were only "herd mentality," the market wouldn't be so complex, and prices wouldn't be so difficult to predict.

So rather than blindly believing in the "herd effect," it's better to acknowledge that the market is composed of participants with various goals, information, and risk preferences. This understanding is actually closer to reality.