FOMO (Fear of Missing Out) is a psychological state in which a person feels anxiety about missing opportunities. This term is widely used in various fields, including social media, marketing, finance, and especially the cryptocurrency market.

In the crypto market, FOMO is expressed in impulsive asset purchases due to the fear of 'missing out' on a trending rise. This can lead to investments at price peaks, often resulting in significant losses.

Examples of FOMO in the crypto market

  1. Bitcoin boom in 2017
    During the peak rise of Bitcoin in December 2017, the price reached $20,000. Many investors, succumbing to FOMO, bought the asset at its peak, after which a correction followed down to $3,000 in 2018.

  2. Shiba Inu (SHIB) and 'meme coins'
    In 2021, meme coins like SHIB gained attention due to viral popularity. Investors driven by FOMO invested in assets without deep analysis, hoping for sharp growth, but faced high volatility and losses.

How does FOMO affect investor behavior?

FOMO is an irrational emotion that provokes:

  • Impulsive trades without analysis;

  • Entering the market at a price peak;

  • Inability to stick to a predefined strategy;

  • Neglecting risks and excessive leverage.

Why does FOMO occur?

  1. Social pressure
    The influence of social media, posts about 'instant success' and stories of millionaires in the crypto market.

  2. Volatility of cryptocurrencies
    Rapid asset price increases create the illusion of 'missed opportunity,' causing investors to act on emotions.

  3. Herd effect
    When everyone is buying a certain asset, there is pressure to do the same, even if there is no confidence in the validity of that decision.

How to combat FOMO?

1. Develop a strategy

  • Define your investment goals: long-term (HODL) or short-term.

  • Set entry and exit levels in advance to avoid succumbing to emotions.

2. Conduct fundamental analysis

Before investing, study the project: its team, technologies, market prospects, and competitors. This will help make decisions based on facts rather than emotions.

3. Do not ignore technical analysis

Use indicators such as RSI (Relative Strength Index) to determine if an asset is overbought, or MACD to identify potential trend reversals.

4. Gradual market entry (DCA)

Invest small amounts at regular intervals. This reduces the risk of buying an asset at a price peak.

5. Learn to ignore the noise

Limit the time spent on social media and trust verified analytical sources. Posts and memes often create unnecessary pressure.

6. Control emotions

Use psychological techniques to calm down:

  • Practice mindfulness;

  • Remember that the market offers opportunities every day.

Analytics: current situation

FOMO is most pronounced in bull markets when assets show sharp growth. For example, since September 2024, Bitcoin has increased by more than 25% on a monthly timeframe.
However, altcoins do not show similar movement, which raises concerns among investors. This situation intensifies FOMO, causing people to rush from one asset to another.