The phenomenon of 'explosive rise' in cryptocurrencies is not just a sudden price movement, but a complex psychological event.
Behavioral finance shows that these surges evoke what is called #fomo (fear of missing out), where the trader rushes to buy the coin at its highest levels, driven by excitement and the desire to catch up.
But the reality is that these peaks are often distribution areas where large investors (whales) sell their positions at the expense of new traders. Studies indicate that the majority of those entering the market during moments of euphoria lose more than they gain, because they buy at the peak of psychological valuation before a sharp decline.
In 2021, Dogecoin experienced a rise exceeding 14,000% driven by tweets and massive publicity, enticing thousands of new traders. But weeks later, the coin lost more than 70% of its value, leaving many buyers at the peaks with severe losses. This incident became a classic example of how whales and collective emotion exploit to achieve quick profits.
The psychological impact is not limited to financial loss; it generates frustration, loss of confidence, and even withdrawal from investment altogether. The solution lies in understanding the market cycle: calm precedes the rise, and the rise precedes the correction.
The professional trader treats the market as a plan, not as a race. Discipline, analysis, and risk management are the real tools for wealth, not the rush to chase every enticing price jump.