I know what you’re thinking, why would I listen to opinions from people who constantly just ask “wen moon” or “wen binance” but they provide an insanely huge psychological indicator.
I’ve learnt from my time that if a coin has hype around it and big momentum, it’s usually the best time to sell, so I looked into the hype and momentum further. A lot of new investors tend to FOMO in to big green candles thinking it is the start of a bull run for that coin, they follow hype from twitter searching the coin and also listen to random people’s opinions on chat boxes. Smart money always ends up buying the coin before the hype and dumping it on the new investors, resulting in them being baghodlers.
XVG, XRP and TRX are the main culprits of price hype, is it a coincidence that they are all under a $1? Probably not. Naive investors who have seen the ROI from bitcoin over the years will believe that if they go all in to a coin under $1 then it will have a good chance of getting to the same stage. It is very common that when these coins pump 20-30% you get a lot of people calling for them to 5x whilst they completely disregard any bearish TA.
“Wen Binance” has actually turned into a meme due to people thinking Binance has this magic effect on every coin, even in a bear market. Below is a perfect example of the effect of the hype caused and then the true effect of Binance. We’ll completely ignore the accumulation from inside traders before the announcement was made….
Thought I’d add another example that I’ve had my eye on recently.
What to look out for
- Mentions of your coin in trading view chat.
- Euphoria in the coin’s telegram group.
- People telling you “this coin is different to the rest”.
- People telling you “this will go 5x after their announcement next week”.
Comment from POLY telegram group during Binance announcement “Lol why take profit now when this coin can get to 100$. THIS REMINDS ME OF ETH WHEN IT WAS THAT PRICE”
There will be new investors who act like Jordan Belfort after their coin has moved 20% in a day due to other investors FOMO’ing in with them. The coin will then get dumped and they will then put tweets out calling breakouts after every 2% move, don’t be that person.
Trading is purely psychological, and you can learn a lot if you spend time analysing the views of the majority and seeing how often the majority get it wrong. The perfect quote which I’m sure you’ve seen plastered all over crypto is “Be fearful when others a greedy and greedy when others are fearful”