I think it means that it looks more and more like a bubble, so people are less and less willing to buy in the more expensive it gets. It's not about the total amount risked, it's about the total amount of risk.

But this isn't true at all, bitcoin is skyrocketing

Think of it like when you want to buy a company's stock. If the price has recently increased by a lot, many people avoid it because they think it is overpriced. They don't want to risk buying it at this price. It has nothing to do with being able to buy fractions of a coin.

Why would they specify 'entry level' investors then? That argument would surely apply to all investors, not just the entry level ones.

Because people that already hold bitcoin will still be willing to buy. If you bought bitcoin at $1000 you might still be willing to buy at $8k as that would still price your avg bitcoin price at $4500 and won't be making a loss until bitcoin drops below $4500. Entry level doesnt mean your wealth but you being a first time buyer or entering into the bitcoin market at current prices. Which means when the price goes down you are going to make a loss.

It's not formally economically rational to be affected by history this way.

https://en.wikipedia.org/wiki/Sunk_cost

past performance is no indicator of future results.

The price is skyrocketing...

Regardless of whether or not this is the intended meaning of the author... I've been following various cryptocurrencies very closely for a while now, and this type of thinking is surprisingly common. It's crazy the number of times I've seen someone argue the total supply of coins is a limiting factor, or that one currency is more successful than another one because the price is higher. I try my best to correct misinformation, but it goes to show how inexperienced some investors in these markets really are.