Psychology of a Market Cycle: Are Bitcoin Investors In Denial?

There exists a schematic depicting the psychology driving the different stages of a market cycle, and it often gets shared in response to the current sentiment in Bitcoin markets.

According to the “Wall Street Cheat Sheet,” investors in the first-ever cryptocurrency could be in denial and will be caught off guard if Bitcoin falls significantly lower from here.

Where Is Bitcoin In The Current Market Cycle, According to Famous Cheat Sheet

All financial markets are cyclical, and it’s no different for Bitcoin and other crypto assets. After periods of extreme or sustained growth, often comes a retracement of a similar magnitude.

This is exactly what happened after the crypto hype bubble of 2017 popped, causing the irrational exuberance to turn into denial, panic, and later anger and despair. These emotions cause investors to capitulate and sell assets – often at a loss – shortly before the assets begin to rebound and the market cycle restarts once again.

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