Steemit Crypto Academy | Season 3 - Week 5 | Homework Post for @allbert| - Intermediate Course - psychology and market cycle

FOMO

FOMO is a slang used to denote 'fear of missing out' it's used more often as a crypto-related term that applies to the psychology of traders. It is well known that the crypto market is driven by emotions and beliefs rather than valuation and this notion is confirmed by the crypto professor @allbert in his crypto lecture. As the words say, its the fear of missing out on something you feel others are enjoying (for example the fear of missing out on ETH gains when others are partying in their condos). FOMO might give one great urge to buy a coin, not set stops on or take profits on trades you feel will go up considerably. This fear is what drives people to buy at the top of hold losing trades, completely obliterating the rational idea of waiting for re-entry points which more often than not results in losing trades.

The term FOMO is used on people who react to the crypto market based on impulse due to fear of missing out.

Why it happens

According to research, it has been suggested that people are twice as affected by losses as they are by gains so it's of human nature to avoid anything that might lead to loss, pain or regret. So in order to avoid the pain of missing out, some traders are often forced to make decisions they wouldn't have necessarily made if they were being rational. For example you might feel FOMO when you see a particular coin that you don't own increasing in value, this feeling might force you to eventually purchase the token hoping to gain some profits in its current run.

A chart example of when a FOMO situation plays out is given below in question 2!!!

2-Explain in your own words what FUD is, wherein the cycle it occurs, and why. (crypto chart screenshot explanations needed)

FUD

FUD stands for 'Fear Uncertainty and Doubt'. it's a feeling which causes an unexpected or uncalled-for market movement, for example, the price of a coin going low not based on fundamentals or historical price action but due to bad news that spread all around social media. More often than not, the bad news turns out to be something not grounded in reality or something silly.

_{Chart illustrating areas where FOMO and FUD played out}

Why it occurs

People tend to be watchful of whatever investments they make or have and tend to have different biases and speculation of their respective performances and whenever one of these biases is confirmed by any piece of news they come in contact with they tend to act for or against it.

One particularly interesting case of FUD, oh and did I mention recently? is the BTC spike that happened recently upon information spread on social media that AMAZON is now accepting bitcoin as payment. Of course, this led to a spike in the BTC asset as we see the initial long candlestick was created by fake news circulating around social media and was sustained by FOMO until the truth about the news was released about 19 hours when this screenshot was taken.

That particular hour we saw the BTC pair lose a thousand dollars in mere minutes.

3- Choose two crypto-asset and through screenshots explain in which emotional phase of the cycle it is and why. Must be different phases

For this task, ill be making use of the AXS token

From the charts, we observe the pair has been on a nice gentle bullish trend, and on the 23rd of july we saw the token amass nearly 100% gain on price, opening at $24.8062 and making a high at $48.8 before closing at $42. We saw price rally towards $53, ohh definitely the price has caught the eyes of some investors. I guess it's time to get fully invested

I believe the AXS token is currently in its thrill stage.

Next, the ALICE pair.

It had been ranging around the marked support and resistance for some days now until its recent breakout which births the HOPE stage. This breakout sees the ALICE pair crossing a minor resistance, heading towards a major resistance which it barely hits before retracing. The ALICE pair is going to see some retests of its resistance zone in the coming days and it might just break out and birth the optimism stage

4- Based on the analysis done in question 3, and the principles learned in class, make the purchase of 1 cryptocurrency in the correct market cycle. The minimum amount of 5USD (mandatory), add screenshots of the operation and the validated account.

This is my verified account for trading and so on. Although Binance verification is a bit of a pain for me, its still my preferred exchange for trading. I haven't been able to get past the intermediary verification process however the basic process has been completed and verified as shown in the image below.

In light of the analysis of crypto assets done in question 3 and the principles learned in class. I'll now be making an investment in the AXS token. I believe it's currently in the thrill stage and I intend to ride until I begin to see signs of bullish exhaustion

Here is my current balance of the AXS. I currently don't own this token. I'll go ahead and purchase some AXS tokens on the spot market with USDT

I'll be exchanging $14.9 worth of USDT for AXS at market price.

• My balance after tokens have been purchased.

Thank you
Concerning the questions assigned by crypto professor @allbert and in accordance with the respective rules highlighted. I've done my research and tried to tackle the intermediary course. I was able to learn new things through the course of this task. I'd leave the assessment to the professors.
Thanks to the steemit team for this wonderful learning opportunity once again. It's been nice so far, I'm forever grateful.
Thanks for reading my write up and thanks for your support
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