Ha! I've been around long enough to have seen this over and over in various markets (had a close friend lose about $900k of his own money on Black Monday in '87), and was thinking the same thing two days ago, when are we going to see a dead cat bounce. During the "crash", kept wondering how many people would get suckered in to buying the dip right away. We may be a way from the bottom, and there is so much uncertainty with Bitcoin (short-term) right now, it certainly is a reasonable strategy to sit on the sidelines and wait a bit.
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Wow, $900k is a hefty sum, hopefully it was money your friend was ready to lose.
Agree with you that most people get easily tricked by the market because of their lack of technical knowledge and also because greed coupled with fear of missing out the next "BItcoin killer" or whatnot. That's the reason why I have started this blog, I want to give people objective, technical information to educate the many without trading experience so they don't get preyed upon :)
The market was hot and he was trading on margin, and kept rolling until the point where he had close to $500k out in calls. The the 19th hit and bam. Gone. Was probably about 30-40% of his net wealth at the time. He certainly wasn't in a position to lose it. Big lesson there.