Market sentiment and emotional sentiment in crypto are two important factors that influence prices and market volatility.

1. Market Sentiment

This is how the investing community perceives the market at a given moment. It does not rely on technical or fundamental indicators but mainly reflects trust, fear, or greed. Some influencing factors:

FOMO (Fear of Missing Out): When prices rise sharply, investors fear missing out on opportunities, leading to panic buying without a clear strategy.

FUD (Fear, Uncertainty, and Doubt): When bad news spreads (exchange hacks, regulatory issues, whales dumping...), investors panic and sell off.

Hype & Trend: New trends like DeFi, NFT, Metaverse, AI Coin... can push market sentiment higher, creating price surges.

Whale Manipulation: Whales can create false sentiment by pumping prices to attract buyers and then dumping.

2. Emotional Sentiment

This is how individual investors react to the market, often driven more by emotions than rationality. Some common emotional states:

Greed: When seeing others making significant profits, investors can easily get caught up without considering the risks.

Fear: When prices drop sharply, investors panic and sell off without considering long-term strategies.

Hope: Holding onto a coin for too long with the belief that it will recover despite indicators showing a downward trend.

Despair: When suffering heavy losses, investors lose faith in the market and may withdraw completely.

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