Bitcoin Investor Psychology

[JohnBitCo]

People were willing to buy bitcoin at all time high prices and everyone was greedy. Now when bitcoin is half the ATH price, we see no buying pressure. It's strange that people are willing to get bitcoin at high prices but they don't buy it when bitcoin is available at fair cheap prices. This is strange bitcoin investor's psychology.

[jackg]

I think this is an idea people might not have noticed ot be too familiar with but I imagine a lot of retail investors like to buy crashes and it's companies competing with each other that like to sell them.

If you think about the 20%+ crashes in the stock market that happen, a lot are likely caused by companies trying to push the price lower in a coordinated effort to buy more for cheaper - the same might be true for bitcoin.

[pooya87]

This is partly because of a combination of greed and misinformation. As far as I remember I have been seeing people during crashes like this who are wishful for a bigger drop so that they can buy more bitcoin (for same amount of money), they are also misled by some manipulators on the internet into believing their wishes can come true.
For example when price was $3000 they were wishing for $1500 which is why the time it took to go from $4000 to $7000 was ridiculously short! (they all panic bought).

[avikz]

So true! People don't realize an opportunity when it knocks on their door. But leaps in when they see the return is breaking previous record.  That's called FOMO. We have seen similar trend back in late 2017 when bitcoin reached 22k. We had seen tremendous buying pressure at that price level which we had not seen below this level.

But I believe, these group of people are just investors who are here to make money and don't know anything about the blockchain technology or how bitcoin works. But they are missing a golden opportunity for now.

[Kakmakr]

No, it is easy to explain.

Remember, the people that bought at $60 000+ did not know that it would be the next ATH, they saw the fast increase in the price and they might have thought that the $60 000+ could be going to $100 000+ at that rate.

The people not buying at $35 000 are also easy to explain, because people are experiencing a sharp drop in the price and they think that Bitcoin might be collapsing and they do not want to buy when the price is going down. (Also, some traders in other Commodities are not used to such volatility, so a price drop of almost 50% are a trigger for panic to them)

The more experienced Crypto trader see this as an opportunity to buy at the dip and to potentially sell at a huge profit in the future.  

[cabron]

Not everyone will buy with just this crash because there is more panic yet to come. If they buy the dip, they will have to buy again in the next dip of the dip and then buy again as it dips further while losing more money. The traders who had seen this happen in the past learned already that this bear could last for months. But the retail investors who had only started investing in the mid-2021, they'd probably panic selling already. I bet there will be another thread about BTC Death.

[mk4]

Surprise surprise! Most people don't know crap about investing, and they mostly just join in on the hype hoping to get rich quick. And funnily enough, they'll be back at the next all-time highs, whenever that is.

[JohnBitCo]

When the price of bitcoin is on the rise, people think that it will rise more and therefore they try to jump in a running train. They buy quickily at that point in order to get the lower prices. But when the prices are stuck at lower levels and market sentiments is bearish, people still want to buy but they tend to wait in the hope to get more cheap prices.

Surprise surprise! Most people don't know crap about investing, and they mostly just join in on the hype hoping to get rich quick. And funnily enough, they'll be back at the next all-time highs, whenever that is.

That's another way to make the adoption faster. Once bitcoin crossed 50,000$ the first time, we saw how this news become mainstream and a lot of new investors and retailers joined in all time high. The same will happen when bitcoin will cross 100,000$.

[GeorgeJohn]

The problem of investors skipping to purchase bitcoin is fear, now Bitcoin is low in price and affordable to purchase in quantity size but investors backslide, i suggest that one of the reasons while they don't want to buy Bitcoin now due to they are expecting Bitcoin to decrease more to the extent of getting to twenty thousand ( 20k)..lol.at least by this period we to know that people like to be in to purchase bitcoin when the price is elevating, but when it decreases they became afraid to purchase, so what do  you think that might be cause. 

[batang_bitcoin]

That's always the case and even in 2017. But I think, as the same pattern goes, if they've bought at the top and they're worried and it's good if they haven't sold.
Just imagine how much bitcoin would be after the peak last year and the same for those who have bought on 2017 peak and just held it for a few years, they might get their returns soon and could have a 2x-3x if it's a whole bitcoin. But if it's just a few decimals, that won't really matter if it's about $500 and above.

[mk4]

That's another way to make the adoption faster. Once bitcoin crossed 50,000$ the first time, we saw how this news become mainstream and a lot of new investors and retailers joined in all time high. The same will happen when bitcoin will cross 100,000$.

Eh. I would call it 'adoption' if the people actually realized bitcoin's importance and hence stayed for the long-term. People who will enter at the top(hence why we've had blow-off tops in the past) and exit near-bottom on the other hand, eh nope.

[Poker Player]

This is not only the psychology of Bitcoin investors, it is the psychology of retail investors in general, of the uneducated and unprofessional, which are the majority.

It is just the other way around (leaving aside other strategies such as DCA). You buy when others are afraid or there is a bloodbath, etc. Professional investors have it right. As in RE, you make money when you buy (at a cheap price).

[virasog]

The problem of investors skipping to purchase bitcoin is fear, now Bitcoin is low in price and affordable to purchase in quantity size but investors backslide, i suggest that one of the reasons while they don't want to buy Bitcoin now due to they are expecting Bitcoin to decrease more to the extent of getting to twenty thousand ( 20k)..lol.at least by this period we to know that people like to be in to purchase bitcoin when the price is elevating, but when it decreases they became afraid to purchase, so what do  you think that might be cause. 

So what if we don't dip to 20K and this 33,000$ was the bottom. Even if we dip to 29K - 30K, does it really matter that we bought at 29K or 35K ? It will not matter when the price will reach 70,000$ and above. No one can catch the exact bottom.

For example, those who bought bitcoin at 8000$ and those who bought at 12,000$ way back in 2019 /2020, does it matter now when bitcoin is 5 to 6 times higher of those prices. But think of those who didn't buy at those prices, thinking it will go down more. Those are the people who usually buy the top in fear of missing out.

[bittraffic]

The problem of investors skipping to purchase bitcoin is fear, now Bitcoin is low in price and affordable to purchase in quantity size but investors backslide, i suggest that one of the reasons while they don't want to buy Bitcoin now due to they are expecting Bitcoin to decrease more to the extent of getting to twenty thousand ( 20k)..lol.at least by this period we to know that people like to be in to purchase bitcoin when the price is elevating, but when it decreases they became afraid to purchase, so what do  you think that might be cause. 

It may very well be the cause they are not buying. So much fear that it's still going to drop, they have been sending their altcoins to convert to USDT. Users seem to be united in the discord channel in seeking help on what to do. 20k makes sense because there is a support line than the $35k.

I have some doubts already that Bukele has no crypto advisor, which he had been buying even when the market already started to plunge. There are many BTC investors in El Salvador, someone close to him should have told him to hold his horse.

[KaliLinux]

People were willing to buy bitcoin at all time high prices and everyone was greedy. Now when bitcoin is half the ATH price, we see no buying pressure. It's strange that people are willing to get bitcoin at high prices but they don't buy it when bitcoin is available at fair cheap prices. This is strange bitcoin investor's psychology.

It is the fear of thinking when they buy, the market might go down some more so they wait, and even when most traders still see that the market is going green, there is also the doubt that it might just be a trap and there might be another reversal but you will notice that traders will only jump into the market when the price is continually going up when they have missed the bottom, hopefully, FOMO again.
Notice I used the word "Traders" and not "INVESTORS" because real INVESTORs would take advantage of every dip even if it is by DCA because their focus is more long-term.

[GeorgeJohn]

<...>

So what if we don't dip to 20K and this 33,000$ was the bottom. Even if we dip to 29K - 30K, does it really matter that we bought at 29K or 35K ? It will not matter when the price will reach 70,000$ and above. No one can catch the exact bottom.

I barely understand exactly what you are emphasising on, even the reference points of values you portray, is contradictory everything, Incase you did not understand me very well, using your digits values to explain, let us assume that bitcoin price is forty thousand (40k) and everyone is rushing to purchase BTC and the market became competitive.

now the price have to decreased from (40k- 30k) buyers pause not to purchase again, because of fear, having the mindset that the price will decrease again to (20k) before they could purchase.

So if mistakenly the price really dropped to (20k) and accelerate again to a point that is higher than (40k) which is the initial point, to (50k) the profit status of some one who purchased 30k and 20k is not same.

Using this illustration to expatiate more, those investors that purchase Bitcoin in 2010 and 2011 and bank their btc till 2019 before they sell, and those who purchased in 2019 and same 2019 profit are not same...

[Henrobakkara]

The problem of investors skipping to purchase bitcoin is fear, now Bitcoin is low in price and affordable to purchase in quantity size but investors backslide, i suggest that one of the reasons while they don't want to buy Bitcoin now due to they are expecting Bitcoin to decrease more to the extent of getting to twenty thousand ( 20k)..lol.at least by this period we to know that people like to be in to purchase bitcoin when the price is elevating, but when it decreases they became afraid to purchase, so what do  you think that might be cause. 

It may very well be the cause they are not buying. So much fear that it's still going to drop, they have been sending their altcoins to convert to USDT. Users seem to be united in the discord channel in seeking help on what to do. 20k makes sense because there is a support line than the $35k.

I have some doubts already that Bukele has no crypto advisor, which he had been buying even when the market already started to plunge. There are many BTC investors in El Salvador, someone close to him should have told him to hold his horse.

This is to say that you understand that there are people out there that can really predict the market and say this will be the bottom of the market so hold on till the market gets to that level  Investors will naturally buy dips as it occurs because we don't know for sure where the bottom is so if he has been buying and the market dips some more and you still have the means, you buy some more. Even people like Michael Saylor that have been in the space forever bought Bitcoin at a higher price than today's $36+ per BTC

[Ararbermas]

Common mistake of every new investors is they're always on panic buying mode when the price is on top without knowing there's always a correction wherein reason most of them always ended losses. Well that's the sad fact that until now still happening because of greediness. Maybe they're not comfortable buying at the dip reason they still want to buy when there's a progress already.  I mean even their history when it comes such strategy isn't good.

[Pmalek]

That's just the way the brain works. Whenever something drops in value or losses momentum, people will create negative associations with that. It it were good, or as good as they say, it wouldn't be losing value like this. That's the way people think. When you add negative press coverage and constant reminders how Bitcoin has lost 40-50% in recent months on top of that, what we are seeing now is the result of that.

The opposite happens when Bitcoin starts rising sharply. Everyone starts talking about it. That creates increased interest and people start buying again. You will then be bombarded with news and headlines saying that Bitcoin will reach $100k, 200k, and some crypto influencer suggests he will eat his dick on Twitter if it doesn't go up to $1 million a coin. The fear is now gone and it's back to buy whatever you can get your hands on.

Rinse and repeat.

[LogitechMouse]

Its just how it is and as Bitcoin goes higher and higher, the more it hurts the investors especially those who bought at the peak.
When they see Bitcoin at its peak, many people are thinking that it will go even higher but that doesn't case always. Our brain thinks that it will go even higher but its the complete opposite but hey, who knows where is the peak right . That is why people are still buying even though they know that it is high already because they don't know where is the peak and they are gambling that it will go even higher.

Well, investing is like a game where there are winners and there are losers. Those who bought at the peak are the losers and those patient enough and know when to wait an opportunity like this are the winners. Now that it is confirmed that we are in a bear market already, now is the time to be greedy and buy when there is blood on the market. Accumulate more coins. There is a lower risk and a higher reward right now than buying at the peak where the risk is very high and the reward is very low. Anyway, many are expecting that Bitcoin will reach its previous ATH of $69,000 soon right? .