Let's take a look at this scenario which we must have heard about or seen or experienced in the cryptosphere.
John heard about a certain crypto that was about to be launched newly but he ignored saying the project is a scam or he isn't just interested in the project, then when the project launches he saw the project again but was still skeptical about going into the project so he decided to invest his money in another coin.
After a while the coin then begin to increase in price rapidly, John then begin to think about entering the project he becomes anxious, so he decided to wait for a retract in price but the coin price keeps going up, his emotions set in and he jumps into the project.
He leaped without looking and at that point the coin either doesn't move upward as before again or it maintains the price and there was just a minor change in price. At this point John says the coin is catching it's breathe it will eventually move up at this point the coin then decides to give John a surprise and it reverses to a lower price, John gives assurance that it's a path for re accumulation and there will then be an increase in price but the coin keeps going down which makes John be in loss but he won't come out of the project and he keeps hoping till the price goes very low he will then move out of the project.
This scenario potrays the true meaning of FOMO, which means fear of missing out fear of moving out.
Fear of missing out here was the point at which John became anxious about the increase in price of the coin, so he didn't want to miss the opportunity of getting massive profit which made him enter the project. In a nutshell fear of missing out means the act of investing in a project because the price of the project is increasing rapidly and one doesn't want to miss the opportunity.
Another meaning to FOMO can be fear of moving out which was the fear in John which made him move out of the project because he was losing and didn't want to loose completely.
Let's take a look at the chart above, according to research and based on our definitions it can be found that fomo do take place during a bullish run, everybody loves to be with the winning team so people fomo whenever an asset price is rising rapidly.
Just as indicated in the charts various spot are indicated where fomo happened. It always happen between bullish trend and sometimes might be the end of the trend.
FUD
Fear, uncertainty and Doubt which acronym is known as FUD is an act of influencing ideas or perception of a coin or project in crypto market by spreading false, negative and misleading information which causes a negative impact on the market generally.
For the crypto lovers they use the term FUD to disregard or dismiss those who are soreadng false informations about crypto. These people who spread false informations are called fudsters and sometimes big investors in crypto aslo spread false information to use it to their advantage.
These Fuds ranges from talks that Bitcoin is valueless, crypto gives access to cyber attack and so on. These Fuds can come from government and different entities this is always dismissed as fuds by crypto enthusiast. It is a general description of false and misleading topics.
The screenshots above shows the effect which FUD has on the market in general, after every fud comes a downfall in the price of the asset. For example on the first chart when the price of the asset fell from $54k to $40k there was fud which brought the price of BTC more lower than expected.
The Fud made alot of investors to sell off and this kept bringing down the price of BTC till it got to $29k and there was a lot of news if it could ever rise back and this kept the price dwindling for a long time at the range $28k.
Fud comes in when there is a drop in the price of an asset and yhsi fud causes panic among investors and they sell off as well.
Analysis of chart based on emotions
This chart is for the pair SHIB/USDT, from the beginning of the chart we can see a uprise in the price with a gradual decrease in the price, this been a competition among the buyers and sellers looking for who will be more dominant.
Finally there is fall in the price which will have triggered more investors to sell bringing the price down more than it should. Investors who haven't had the chance to enter the market will then begin to buy the asset at this price making it rise a bit in price, this is when HOPE sets in for the investors who weren't able to take profit before the fall.
Also it is a hopeful moment for the investors who invested after the dip hoping the price will move up from this point.
This coin is currently in the hope emotional phase.
This is another chart showing another type of emotion in trading. This is the chart for the pair C98/BUSD which started with a accumulation period which is more like the believe.
Believe is the stage where investors hears about the coin and begin to buy into the coin immediately it was launched. After the launching the buying is more agggresive because no one wants to miss out from the project during this time there is a spike in the market price which comes to an halt when early investors begin to take profit and at the same time new investors begin to invest that is the cause of the wavy candlestick.
When there is a breakout towards the upper part leading to an uptrend, then investors begin to get excited and sees the coin as a potential coin this makes investors willing to sell other assets to get this particular coin thinking it's time to be a multimillionaire.
This emotion is called thrill because they are excited about the way the price keeps going upward. This coin is currently in the thrill emotional phase.
The best time to enter a trade
Whenever you want to enter a trade or invest in a crypto project it is advisable to buy at the red market and sell off when it is green, this way you don't buy due to fomo and you get to make profits as well. I will be showing an example below with the trade of C98 coin.
According to the screenshot above, we can see that the price of the asset has fallen to a lower level. This is the best time to invest in the project if you really want to because it's in the dip state and entering now has no harm unlike if you had entered at the top before the fall.
I will be buying the asset now, this coin can be bought through CEX like binance or DEX like poocoin, for this tutorial I will be using poocoin, after checking the chart and doing analysis, I then load poocoin.app on my dapp browser of trust wallet. When the page loads I search for the coin c98 and then click on trade.
I traded xrp for the c98 coin, I used xrp worth $7 which gave me 6 unit of C98 coin. Then I click on swap and approve to approve the transaction
The coin has been successfully bought and it has reflected on my wallet. So all I have to do is wait for the price to go up before selling off.