Crypto Market Psychology Explained
Crypto Market Psychology Explained The cryptocurrency industry has become a sophisticated ecosystem whereby the dynamics of price tend to go against the rules of conventional finance. In comparison to traditional markets, the crypto trading is considerably affected by human emotions, which is the primary consideration of investors. Knowing the Crypto market psychology of the participants can be a strategic advantage because in most cases they are making decisions based on fear, greed and herd mentality but not on fundamentals. The Role of Fear and Greed Fear and greed are the two primary emotions which drive crypto markets. The greed will drive traders to purchase more when the market is on an upswing. This has been referred to as FOMO in crypto , or the fear of missing out. Individuals are willing to invest due to profits being made by others and not due to thorough research. The reverse is true of fear. Panic selling sets in when the prices fall or bad news is circulat...