🌀 Greed and Fear: The Psychological Trap in the Market
Most people think:
🐂 Bull Market → Greed
🐻 Bear Market → Fear
But it’s not that simple…
1️⃣ Bear Market: The Temptation to Buy & Survival Dilemma
There’s a temptation to put all your funds in, thinking it’s the bottom.
People may even go into debt to buy at the “bottom.”
The problem: no one knows how long a bear market will last. It could stretch for years, and then a person might run out of money to live on, if they put everything on waiting for a rebound to lock in profits.
The Real Dilemma: “How do I allocate my funds to survive a bear market without being forced to sell my positions due to lack of resources?”
Psychological Trap: the temptation to buy too much can lead to financial strain, even if the long-term trend eventually goes up.
2️⃣ Bull Market: The Temptation to Hold & Fear of Selling Too Cheap
When prices rise, it feels safe to hold positions longer.
Instead of taking profits on time, people hope to make even more.
This encourages ignoring risk and overholding, trying to catch every additional percentage gain.
The Real Dilemma: “Should I sell now, or wait for a better price?”
Psychological Trap: fear of selling too cheaply can cause someone to miss the chance to lock in profits, and waiting for the next “good” price may take much longer than expected.
🧠 Conclusion
Fear can dominate even in bull markets, just as greed can dominate in bear markets. Recognizing these counterintuitive emotional cycles is key to avoiding costly mistakes.
#CryptoPsychology