Recently, during discussions, I found that many people react too aggressively to the expectation of interest rate cuts. "Should I fully increase my BTC holdings now?" "Is it a good time to bottom fish small coins?" Similar questions are appearing frequently. Honestly, this way of thinking hides many risks. Today, let's review some of the most common pitfalls retail investors might encounter at this stage.

**Misconception 1: Converting Expectations Directly into Actionable Orders**

This is the most common thinking trap. The current market environment is "rising expectations of rate cuts," but this is still some distance from "rate cuts becoming a fact." The market does tend to price in expectations early, but the problem is that expectations themselves are uncertain—an unexpected inflation report or a change in policy signals can reverse sentiment. For example, an investor once went all-in upon seeing the rate cut expectation, only to be caught off guard when inflation data rebounded, resulting in a 20% loss. He was forced to sell in anxiety. There is always uncertainty between expectations and reality. Many have learned this lesson, but it’s easy to forget during market euphoria.

**Misconception 2: Blindly Worshipping Small Coins and Ignoring Major Market Assets**

Every rally sees people betting on small coins, with the simple and crude reason—big gains. That’s true; small coins can perform astonishingly in the early stages. But during periods of ample liquidity, what should be the most rational allocation of funds? Major assets like Bitcoin and Ethereum, with deep market caps and strong consensus. Why? Because they stand the test of time and are less susceptible to manipulation by whales. The stories of small coins are compelling, but the risks are proportionally higher—fast gains, fast drops, and easy to be washed out by market manipulators. Based on this logic, a balanced allocation might be: 80% in major assets, and 20% in small coins for trial. This way, you can enjoy market gains while controlling risk exposure.

**Misconception 3: Being scared out by short-term volatility**

Market fluctuations during expectation phases are normal. Short-term corrections are often manipulative moves by large players. From historical experience, the most common phenomenon at this stage is retail investors unable to withstand a few days of decline, selling near the bottom, only to watch the market start to rise and regret missing out. The solution is simple—set your stop-loss level in advance. The key is to stick to it once set. As long as the price doesn’t fall below your psychological bottom line, you should hold firm. Short-term noise is not enough to change the medium-term trend. Whether you make money depends largely on whether you can endure this turbulent period.

**Overall Viewpoint**

Interest rate cut expectations are indeed a positive signal, but the signal itself does not mean an immediate buy order. The market will present opportunities to those willing to act, and lessons to those who are not cautious enough. The key is to recognize the difference between expectations and reality, maintain a balanced allocation, and have the mental resilience to withstand volatility. These seemingly simple principles are often the easiest to overlook in real market conditions.