The Cycle of Bull Markets: Emotions Drive Market Rhythm
Current market indicators are performing normally, and the bull market continues to develop healthily. The operation of the cryptocurrency market is often accompanied by fluctuations in emotions:
Four Stages of a Bull Market
1. Arising from Despair: The market bottoms out in extreme pessimism, and a few quietly position themselves.
2. Rising Amid Hesitation: The initial rebound confuses investors, most fear missing out but do not dare to enter the market.
3. Expanding in Optimism: Market confidence returns, funds gradually flow in, and the bull market enters a main upward wave.
4. Ending in Madness: Market sentiment reaches its peak, investors become overly optimistic, bubbles gradually form, followed by adjustments.
The Emotional Misconceptions of Retail Investors
• Excessive Pessimism: At the bottom, many panic and cut losses, missing out on positioning opportunities.
• Excessive Optimism: During the frenzy stage, blindly chasing highs becomes a buyer at the top, ultimately getting trapped.
The Game of the Cryptocurrency Circle
Market fluctuations are not only the result of supply and demand but also a contest of emotions and psychology. The various stages of a bull market represent the game between major players and retail investors, as well as the dividing line between profit seekers and trend followers.
Summary:
The cycle of bull markets stems from emotional fluctuations. Investors should remain calm and avoid emotional trading. By patiently positioning in despair and rationally exiting in madness, one can maintain an undefeated position in the cryptocurrency circle.
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