Herd Mentality in Bitcoin

[Furball808]

What is herd mentality?

https://www.verywellmind.com/how-herd-mentality-explains-our-behavior-7487018

Herd mentality, also known as mob mentality or crowd mentality, is a psychological phenomenon where people conform to the beliefs, behaviors, or attitudes of the majority in a group.

How is this observed in bitcoin?

During bull cycles, people buy because others are buying. “They might know something I don’t so I’m just gonna follow them.”. Others also experience FOMO or fear of missing out when they see others buying.

During bear cycles, people sell because others are selling. “They might be right about how bitcoin will finally crash.”. People are driven by fear and the fear is validated by others selling.

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

[escrow.ms]

This is actually how big players make their money, they dump when price is high and buy again after crashing the market.

[Sasori17]

This is solid advice but way harder to execute than it sounds. When Bitcoin's dumping 30% and your portfolio is bleeding, your brain screams at you to sell. That's when herd mentality really kicks in.

The whales know this. They're counting on retail to panic sell at the bottom and FOMO buy at the top. It's basically a wealth transfer from emotional traders to patient ones.

Honestly though, most people are better off just holding long-term rather than trying to be contrarian traders. Going against the herd sounds easy until you're actually doing it alone while everyone tells you you're an idiot.

[goldkingcoiner]

What is herd mentality?

https://www.verywellmind.com/how-herd-mentality-explains-our-behavior-7487018

Herd mentality, also known as mob mentality or crowd mentality, is a psychological phenomenon where people conform to the beliefs, behaviors, or attitudes of the majority in a group.

How is this observed in bitcoin?

During bull cycles, people buy because others are buying. “They might know something I don’t so I’m just gonna follow them.”. Others also experience FOMO or fear of missing out when they see others buying.

During bear cycles, people sell because others are selling. “They might be right about how bitcoin will finally crash.”. People are driven by fear and the fear is validated by others selling.

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

Differentiate between herd mentality and common knowledge otherwise you could buy or sell at the wrong time.
Then you'll be in a panic to get your coins back during the pump.

[Wind_FURY]

What is herd mentality?

https://www.verywellmind.com/how-herd-mentality-explains-our-behavior-7487018

Herd mentality, also known as mob mentality or crowd mentality, is a psychological phenomenon where people conform to the beliefs, behaviors, or attitudes of the majority in a group.

How is this observed in bitcoin?

During bull cycles, people buy because others are buying. “They might know something I don’t so I’m just gonna follow them.”. Others also experience FOMO or fear of missing out when they see others buying.

During bear cycles, people sell because others are selling. “They might be right about how bitcoin will finally crash.”. People are driven by fear and the fear is validated by others selling.

The people who are buying because other people are buying, OR selling because other people have started to sell usually take their time before they actually act - and then act LATE.

If they acted as soon as people started to buy the DIP, they probably would be comfortable HODLing their Bitcoin.

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

I believe it's complicated because - "Don't Catch A Falling Knife".

In Bitcoin, use the 200-Weekly SMA as your guide.

[Cointxz]

Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

Moving against the herd will result to losses rather than gains since the continuous price growth of Bitcoin from low to the ATH means that many(the herd) are holding rather than selling.

So moving against the majority means you are still not buying until no because the price is continuously growing. This short term dip doesn’t picture the majority decision since the price is still holding on.

On Bitcoin, I believe following the herd is not a bad idea since most of the Bitcoin users preferred holding rather than trading it.

[livingfree]

But I don't think that when the whales are selling, others are selling and so every time that there's a massive sell, there's no herd mentality that's applied IMO.

Those who don't research what they do are going with the herd. They've heard Saylor buys bitcoin, they'd definitely buy it as well because he did it.

There are advantages and disadvantages for going with the herd. I guess those who have benefit most were those who went with the herd on the early days.

[JaredIbrahim]

Herd mentality is the heartbeat of Bitcoin’s volatility. It turns price into pure, contagious emotion—greed in a bull run, fear in a bear market. The ironic wisdom in crypto isn't just understanding this, but feeling its pull and consciously choosing to step outside of it. Real advantage comes from quiet conviction when the crowd is loudest, and disciplined caution when it feels like a party. It’s less about timing the market, and more about untangling your own decisions from the roar of the herd

[Spaceman1000$]

What is herd mentality?

https://www.verywellmind.com/how-herd-mentality-explains-our-behavior-7487018

Herd mentality, also known as mob mentality or crowd mentality, is a psychological phenomenon where people conform to the beliefs, behaviors, or attitudes of the majority in a group.

How is this observed in bitcoin?

During bull cycles, people buy because others are buying. “They might know something I don’t so I’m just gonna follow them.”. Others also experience FOMO or fear of missing out when they see others buying.

During bear cycles, people sell because others are selling. “They might be right about how bitcoin will finally crash.”. People are driven by fear and the fear is validated by others selling.

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

If you have comprehensive understand of how Bitcoin works, then the herd's actions wouldn't bother you. Bear cycle does happen a lot, but it's also in that kind of season wise investors increase their accumulation. The mob is not always right, you can do will to stand out. Fear is a psychological factor that you need to defeat as an investors because it creates room for panic which easily can be amplified by the herds... But being firm and experiencing different market cycle without panic will help build your resolve in line with your aspiration.

[Blour]

Everyone's just following the crowd with Bitcoin—buying the hype, selling the panic. It makes the price crazy. But real believers just sit still and ignore the noise.

[TheUltraElite]

You can be just doing the opposite and make a lot of money.

Just sell when everyone is buying and buy when everyone is selling. Is that not sounding too simple? This is because our minds are hardwired like that. We dont like to sell when everyone is buying because we feel we are being left out.

But for bitcoin, you can be confident about prices because it will eventually go up.

[Alvin_talk]

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows.

I kinda agree with you on this partially but it is also important to note that the so called herd mentality doesn't apply to everyone in the market. There are sets of individuals or participants to consider, those who do not carry out proper research before taking any action, they are usually moved by social media hype, headlines and what every other person seems to be doing. This is the group that would be highly vulnerable to herd behaviour.

We also have those who understand bitcoin and well enlightened on market cycle, risk management principles, etc. Although, these kind of participant still have emotions for instance, fear, excitement, etc however there decisions tends to be guided more by analysis rather than crowd behavior.

So I will say the herd mentality is common among ignorant individuals who know little or nothing about the market. Herd mentality doesn't define bitcoin, it is only a behaviour of certain class of market participants.

How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

This doesn't make sense to me because your final analysis or assessment of the market may may produce the same result as that of majority, in such case the herd will be a nice choice to follow and there are also scenarios where after market analysis, your results or findings will be different from that of the majority, in such a case, you may consider going against the herd. To keep it short, it is important you DYOR.

[Don Pedro Dinero]

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

There is a much easier way, and I am surprised that no one has mentioned it yet: do DCA and forget about the noise. Acting contrary to the masses is, in principle, smarter than buying at highs and selling out of fear when prices fall. But if you try to do the opposite, you are 'timing the market instead of time in the market'. You can do that with premium assets. If you believe that bitcoin is one and that, due to its limited supply and other properties, it will continue to appreciate over time, it is best to forget about the price and what the masses are doing, and make regular purchases.

[Son Of Blockchain (SOB)]

 Your topic is cool and i find what you've just said, very informative. It explains the concept of the volatility of Bitcoin in a layman's understanding. People who lack much understanding about a particular thing would always follow the crowd and end up making wrong choices due to their ignorance.
 Anyways I think that not everyone should sell when everyone is still buykg, I learnt that people who are in a good position to sell are those that's held for long, people who's portfolio has held for decade or the full circle atleast. Just added to your last statement for clarity sake so some newbies don't misunderstand you.

[Marykeller]

Sadly, this is the very way it has been for a long time for us to follow the crowd to buy and sell our Bitcoin as most people do. Hardly has it occurred to us that we can stand alone to do the opposite(buy and sell when others are selling or buying) and we will be favorable in the market.

That being said, it's about being strategic, not to be carried away by the noise of the market because that could make you lose your target and focus

[coolcoinz]

Differentiate between herd mentality and common knowledge otherwise you could buy or sell at the wrong time.
Then you'll be in a panic to get your coins back during the pump.

Exactly.

Going against the herd doesn't always work. A great example are companies that went bankrupt or got overwhelmed by competition and never recovered from their lows. Take Nokia for instance. It used to trade for over $60 a share and is now $5. If you bought the stock in 2007 you'd be down more than 80% in 5 years. If you bought in 2000 you'd lose everything because the stock is down like 95%. Holding it for 20 years would not help you to recover.

Going against the herd is the best when the panic is artificial, like when the FED cuts rates and a Wall Street trading company manipulates the price to flush leverage. That's where you should buy because fundamentals go against the price.

[Obim34]

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

Investors are meant to be fast thinkers, why do it like everyone else when you will get better rewards doing it differently.

Sadly, this is the very way it has been for a long time for us to follow the crowd to buy and sell our Bitcoin as most people do.

There is nothing sad, it a strategy that works. Buy when others are selling, even as much continue buying even when others are buying, until you reach your accumulation target, there is no stop from buying Bitcoin.

[Cgrexp]

It is important to understand the difference between gambling and investing and it is frustrating when someone panics when they see a decline. It is not a problem to have a system that buys more on declines, but beginners should be careful not to make too big changes when they see the price rise and fall, as this can lead them to a trading mindset rather than an investment mindset. The ideal for beginners is to buy regularly, with low price action. And although they may miss out on some good declines, it is a more stable approach in the long run.

[Zlantann]

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

My take is that this mentality is mostly exhibited by newbies. The are easily moved by media hype and unhype. They want to buy Bitcoin when everybody or platforms is discussing it. When there is not longer attention, they lose interest. Most people who have had experience with the bull and bear seasons wouldn't be driven by FUD or FOMO. Those who rush in to buy Bitcoin during the bull run are not well-informed because the bear season is the best time to buy if you want to make profit. Those who sell during bear season are transferring discounted Bitcoins to experienced investors.   

[Cryptomultiplier]

It’s important to understand that bitcoin is volatile because people move in herds. One slight movement and the rest follows. How will you take advantage of bitcoin? Move AGAINST the herd. Buy when everyone else is selling. Sell when everyone is still buying.

Investors are meant to be fast thinkers, why do it like everyone else when you will get better rewards doing it differently.

Sadly, this is the very way it has been for a long time for us to follow the crowd to buy and sell our Bitcoin as most people do.

There is nothing sad, it a strategy that works. Buy when others are selling, even as much continue buying even when others are buying, until you reach your accumulation target, there is no stop from buying Bitcoin.

Unlike any other strategy of investment in cryptocurrency out there, an investor has the duty to himself to know how to make their profit or returns be much more than the investment amount.

This herd mentality is just the mentality of many humans today in society and it is just an expected phenomenon that is noticeably predominant in buying and selling Bitcoin.
Some just buy because others are, and sell because others are.
No clear cut reasons for investment in Bitcoin is a sure way to lose more than invested.
DYOR and act according to insight and vision, rather than always following the herd mentality.