Romeo's hallucination is significant for a number of reasons. First, it shows how deeply Romeo is affected by Tybalt's death. Romeo and Tybalt were very close, and Romeo feels a strong sense of guilt over his cousin's death. He believes that he is responsible for Tybalt's death, and he is haunted by his actions.
Second, Romeo's hallucination suggests that he is on the verge of madness. He is so distraught over Tybalt's death that he is losing touch with reality. This is a sign of Romeo's deep psychological distress, and it foreshadows the tragic events that will follow.
Third, Romeo's hallucination is a warning to the audience about the dangers of love. Romeo and Juliet's love is passionate and intense, but it is also destructive. Their love leads to a series of tragic events, including Tybalt's death and Romeo's suicide. Romeo's hallucination is a reminder of the dangers of letting love consume you.
Overall, the line "O, look! Methinks I see my cousin's ghost!" is a significant moment in Romeo and Juliet. It foreshadows the tragic events that will follow, and it reveals the deep psychological distress that Romeo is experiencing.