This psychological cycle follows a mountain-shaped curve, going from the bottom to the peak of excitement and then collapsing back into the abyss.
🔷 The Starting Phase – Overwhelming Doubt
This is the time when the market has just gone through a long winter and is starting to inch up from the bottom.
Doubt - Disbelief:
When the price starts to rise slightly, the crowd that was previously split into 5 or 10 accounts is still very haunted.
They scoff: "It's just a Bull Trap, a total scam, it will crash again, just wait and see."
Hope & Optimism:
Prices don't crash but continue to recover steadily.
Some people begin to hesitantly invest with the thought: "Maybe this time the recovery is real."
🔶 The Peak Stage – The High of the Bubble Party
This is the most dangerous time for the market, where the money of rookies (F0) floods in the most.
Belief & Thrill:
No matter what you buy, you will profit.
You start to flaunt your investment portfolio, using Margin/Futures to optimize profits.
You believe you were born to be a Trader.
Extreme excitement - Euphoria:
This is the BUBBLE PEAK.
The crowd's mentality at this point is complete blindness: "We will be rich! Prices will go to the moon! There’s no way we can lose!"
Savings and borrowed money pour fully into the market.
The harsh truth:
At the Euphoria stage, the "Sharks" and smart money are quietly distributing all the coins they have gathered at the bottom to the excited crowd.
🔷 The Decline Stage – The Slap of Reality
When big money pulls out, the market begins to reverse bloody.
Complacency:
Prices have just crashed hard, but the crowd still naively thinks: "It's just a healthy correction, here's the opportunity to buy more at a low price!"
Anxiety & Denial:
Prices continue to break the bottom.
Profits evaporate, accounts begin to go negative.
You are deceiving yourself: "This project has a good foundation, it's okay for me to become a long-term Holder, it will rise again."
You refuse to Cut Loss.
🔶 The Abyss Stage – The Long Night of Depression
This is the time when the market brutally tortures investors' psychology, defeating the most resilient wills.
Panic:
Prices are free-falling with no support. All macro news is terribly bad.
Capitulation:
Unable to bear the pressure, the crowd decides to hit the sell button on the entire portfolio regardless of the price to recover a little loose change.
"Sell everything, keep some money for breakfast, I'm really scared now!".
Anger & Depression:
Looking back at the pile of evaporated assets, the crowd curses the market: "Crypto is the biggest scam of the century! The securities commission must arrest them!"
Trading volume dries up, groups are as quiet as a graveyard.
The secret of the Sharks:
Right at this area of Capitulation and Depression, when blood flows like a river and no one cares about Crypto anymore, the "Sharks" begin to haul bags to gather stocks at rock-bottom prices.
A new cycle quietly begins.
The financial market is a machine that transfers money from those who act on emotions to those with iron discipline. Understanding this psychological map doesn't help you predict the future, but it helps you reflect on yourself.
If you feel excited and want to mortgage your property to buy coins, you are likely at the peak. If you want to delete the app and curse the market, you are at the bottom – and that is absolutely not the time to sell.
This article is for reference only and is not investment advice. Please read and consider carefully before making decisions.