During a bull market, the market tends to exhibit irrational behavior, which I refer to as being "stupid." Let me elaborate on what I mean by this. When I say the market is irrational, I'm pointing out that highly illogical occurrences are taking place, which deviate from normal patterns. Here are some examples:
Consider the recent surge in NFTs during the previous bull market. Digital images of monkeys were fetching millions of dollars despite lacking any intrinsic value. Similarly, "shitcoins" experienced astronomical gains, multiplying in value by a factor of 100 within days, despite lacking any substantial foundation.
In the current bull market, we're witnessing the early signs of this irrationality. Many individuals are investing in nonsensical "memecoins" with no real value. What's worse is that there's widespread bullish sentiment surrounding these memecoins. People are fervently believing in them, some even investing their entire capital, only to face significant losses later on.
Numerous individuals have reached out to me privately on Twitter, sharing their portfolios and acknowledging that I was right. They've realized the folly of blindly following crypto influencers who advocate for trending cryptocurrencies, which often leads to losses.
This is what I mean when I say the market is becoming irrational: illogical actions are prevalent. Fortunately, crashes during bull markets serve as a reality check, bringing these speculative investors back to earth. They sober up during these downturns and, after experiencing substantial losses, begin to learn from their mistakes. It's regrettable but necessary: sometimes, it takes a significant setback to truly understand and grow.
Avoid being one of these irrational actors. Act sensibly by prioritizing the preservation of your capital over chasing profits. I hope some will heed and apply this advice.
Please note that this post reflects my personal opinions. Thank you for reading.