The crypto market is not just numbers on a screen, but a true arena of emotions. Here, each cycle repeats the same scenario: fear is replaced by greed, the crowd does everything the opposite way, while the big players calmly gather their loot. Today we will analyze why the majority always ends up losing and how to avoid this.
Crowd Psychology: Inertia and Herd Instinct
Any technical analysis, any pattern, any price movement – is not magic, but a regularity of crowd behavior. And here are the key points:
In a declining market, everyone is sure it will go even lower, even when the bottom has already been formed.
In a rising market, on the contrary: everyone expects a continuation of growth, even if the peak has already been reached.
Any thought that contradicts the crowd is met with hostility. Because it is easier for people to go with the flow than to think that reality might be different.
How does the crowd behave in a bear market?
Bitcoin is at 60K – 'It would be nice to buy at 40K'.
Bitcoin drops to 40K – 'Well, now it's definitely 20K, I'll wait'.
Bitcoin is at 20K – 'Better to wait for 15K'.
Bitcoin is at 15K – 'Everything is lost, it will be 10-12K'.
Bitcoin 10-12K (which never happened) – 'I'm waiting for 5K, otherwise it's not interesting'.
The market turns around and starts to rise, but those who were waiting for 5K still do not buy. They are waiting for corrections, pullbacks, miraculous entry points. As a result, they again jump into the market at the peaks when the crowd is shouting about a new bull run.
Why does this happen?
The crowd is not afraid to buy at highs because everyone is confident in the continuation of growth. But at the same time, they panic at the thought of buying at the bottom, because everyone expects an even deeper decline.
There is no eternal decline, just as there is no eternal growth – the market is cyclical. This means you need to act against the logic of the crowd:
Buy when the majority is in panic.
Sell when everyone is confident in eternal growth.
Who wins?
✔️ Those who do not follow the crowd.
✔️ Those who act according to a clear plan, not on emotions.
✔️ Those who understand the cyclicality of the market and do not wait for the 'perfect moment'.
Remember: if the crowd is collectively believing in a decline – it means it is already almost over. If everyone is shouting about growth – it's time to think about whether it's time to take profits.
And now the main question: Have you ever caught yourself doing the opposite? Share in the comments!
———
📢 If you found this article helpful, don't forget to like and subscribe. Your interest motivates me to continue dissecting this chaos! 🚀