As the Bitcoin & crypto space is nearing a correction, I see a potential bullish market coming & it will trigger FOMO — potentially leading to asset liquidation — again!
So grab your coffee as I walk you through this succinct article, is solely dedicated to help you protect your already bruised portfolio.
FOMO (Fear of Missing Out) is a psychological phenomena that significantly influence the behavior of crypto traders, often leading to emotional decisions that result in liquidation — Which is what is yet to transpire in the Crypto & Digital currency space in the next 2 weeks, as I see it.
FOMO (Fear of Missing Out): Often characterized by a Bullish market, occurs when traders feel an intense fear of missing out on a profitable opportunity, usually driven by sudden price surges or hype around a particular cryptocurrency,
$BTC being the protagonist.
When crypto markets roar in a full-blown bull run as previously manifested just a few hours that succeeded Donald Trump’s historical reascension to the apex office on 05th November 2024, everyone felt like the next Warren Buffett — That’s FOMO & it’s coming back soon, even more explosively.
In the Crypto norm, as Bitcoin dominates headlines with parabolic price surges, everyday investors even with least scintilla of experience often succumb to FOMO — the fear of missing out — and rush in without fully understanding the risks.
This normally see traders enter positions impulsively at inflated prices, chasing the trend without conducting proper Technical analysis.
How FOMO leads to liquidation:
Buying near the peak: Retail investors (just like you & I) are famously always late to the party, flocking to Bitcoin & other altcoins only when it smashes through glamorous milestones like $100,000, for worse, occupying large position with high leverage, assuming the trend will continue.
Regrettably, when the market corrects or experiences sudden volatility, their leveraged positions are liquidated because they entered at unsustainable price levels.
How FOMO Cause Liquidations & how to stay safe!
Over-leveraging: As a way to harvest more than the norm, many crypto traders use high leverage to maximize potential profits. While leverage magnifies gains, it also significantly increases the risk of liquidation. FOMO often lead traders to enter trades without proper risk management, making their positions vulnerable to the Whales.Solution: I always advise you use Proper Risk Management: Limit leverage max (25X) and set stop-loss orders to avoid sitting too long on losses.Market Volatility: Crypto markets are highly volatile (In fact the most volatile as far as my grandma knows), with frequent price swings. FOMO-driven buying near the top expose traders to severe losses when the market reverses — as you have little-to-no control over the market wave.Solution: Analyze before acting — tame your greedy emotions by solely basing trading decisions on technical and fundamental analysis rather than emotions or rumors.Lack of Strategy: We all embrace the fact that FOMO fuels emotions & overexcitement, reciprocating to emotional decision-making. Driven by greed, the trader then effortlessly deviates from planned strategies, often resulting in poorly timed entries and exits.Solution: Develop and follow a trading plan with clear entry, exit and risk management rules. You can follow my signals which have seen upto +3,000% daily profits.
So by understanding FOMO & possible harm that travel alongside it, you can avoid emotional decisions that lead to unnecessary losses and liquidation ahead of the coming bull market in 2 weeks time.📈
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— Happy trading, Merry Christmas 🎁 .
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