FOMO

“Fear Of Missing Out” – also known as FOMO – is a term used to express the anxiety you may feel if you do not act quickly when making trading decisions. The idea behind this is that any delay in making a decision can cause you to miss a potential opportunity. Such a psychological effect can affect investors in any market, but especially in the cryptocurrency market. This is because due to its extremely high volatility, the crypto market, especially in relation to altcoins, tends to make millionaires overnight much more frequently than any other traditional market.

For example, you may act under FOMO when you see a coin you don't own increasing in value. This rise is enough to trigger panic in some, causing them to rush to buy any coin that appears to be rising in price. The fear of missing out on the next big win, the currency everyone wants, or being the trader left behind, can be a huge driving force in price swings.

While the emphasis on FOMO is most often placed on the fear of losing a profit-generating currency, the opposite can also be true.

A sudden drop, for example in Bitcoin, can be attributed to a variety of causes such as news of government regulations, stricter economic policies or hacking of a relevant platform. Such news could be enough to make many exaggerate the derogatory valuation of the asset. And as soon as the price starts to fall, speculators may want to sell so as not to miss the opportunity to guarantee a profit or even reduce a possible loss. It is the FOMO phenomenon occurring in the opposite direction to what is normally expected.