Mini Crypto Program Part 2 || "How Psychology Influences Market Cycles", by @thirdeye7771

Greetings everyone. I hope you all are doing great and fine, first of all my warm greetings goes to @liasteem for the opportunity given. I am very happy that I can also finally take part in this very educative program. After reading this post by @liasteem I have gotten a fair understanding of what FOMO and FUD is and i would like to explain these terms to my own understanding.

WHAT IS FOMO
To begin with FOMO is an abbreviation which means Fear of Missing Out, this is actually a feeling of eagerness of getting something out of jealousy or envy. Most people in recent times normally feel a need to have something others have and out of this they normally do unreasonable things or take rational decisions. In the crypto world these things also happen a lot when people normally feel eager to make wealth in very short period. A market user may feel that some big marketers are making huge profits in the bull cycle and will feel the need to buy or acquire assets in other to double their profits in a short period. For instance using the crypto graph below things will explained clearly.

Source: Coinmarketcap

The above diagram shows a graph of litecoin and a stage where market users maybe affaected by the FOMO state. In this instance at a point where the market is at is highest point users who normally fall in this FOMO state may want to acquire assets looking at the recent rise in the market. This users may normally feel jealous of people who make great profit in the bullish cycle of the market aiming to also double their profits they will acquire assets at this point with the aim of becoming rich. With the diagram above you can see that any user who acquire assets at this time will be at a great loss seeing the immediate bearish cycle of the market.

WHAT IS FUD
FUD is also an abbreviation of three words which is Fear, Uncertainly, and Doubt. This FUD normally happens to most market users as you can never be too sure or certain when market prices will increase or rise. This is normally a stage where users sell their assets due to the rapid fall in prices of the market not being sure or certain that it will increase or rise in due time. This is also sometimes as a result of impatience, as the market prices begin to fall and a user starts to loose money, some users may decide to sell in other not to loose everything and may end up loosing alot. With a chart to explain this lets look at the chart below.

Source: Coinmarketcap

From the above market graph from the rapid bearish cycle of the market, this may trigger a market user to sell all assets due to fear or uncertainty that market prices may continue to fall without a rise. This means in this FUD cycle users loose a lot of money with the fear that they may even loose much more assets.

WHERE FOMO OCCURS

Source: Coinmarketcap

FOMO will occur when market users start to feel jealous and envious of other market users great earnings and profits. So then a person who falls pray to FOMO will buy assets at a stage where market is at is highest peak. This means that immediately the user buys assets then the market begins to fall again putting the user in a great loss. From the above graph April 9th and April 10 of 2021 was when the litecoin was at is highest peak so when a user had decided to by assets on these days will have been at great loss since the market prices started to fall . You can see an arrow in the diagram above showing the rapid bearish cycle of the market.

WHERE FUD OCCURS

Source: Coinmarketcap
FUD occurs as a result of fear, uncertainty or doubt. This may occur when a user fears that the bearish cycle of the market will lead to a total loss of assets and may decide to sell at that moment. With the graph above you can see the point circled is a point where a market user may fear that he is loosing all his assets and decide to sell at that moment. This may cause the market user a great loss because of uncertainty that the market prices might rise sooner. From the graph market price of BTC started falling on 14th April,2021 to be precise and at a point where it started rising again. A market user who would have fell in this FUD cycle would have sold his assets on 25th April,2021 where the market price stopped falling. This means with doubt and uncertainty the market user could not have predicted that prices will rise again.

LITECOIN
Using the Litecoin graph I will explain where FOMO and FUD may occur in the graph.

Source: Coinmarketcap
The graph of the litecoin shows both FUD and FOMO instances where it occur, for instance FUD occurs when the market user starts to be uncertain is if market prices will fall to a point where fear sets in and he therefore thinks he might loose all assets and then decides to sell. 25th April,2021 to be precise is a point where a person might fall pray into FUD, this is a point where the bearish cycle of the market that is litecoin to be precise might put fear into the user to sell all his assets. FOMO on the other hand starts from the point of euphoria, with the bullish cycle of the market to the point of euphoria where the market is at is highest peak a market user who falls to FOMO might decide to buy assets at this time. 9th May,2021 to be precise is when the market is at is highest peak, so if a user decides to but assets at this time without correct prediction of changes in market prices will lead to loss of money and hence depression.

BTC

Source: Coinmarketcap

The BTC graph also clear shows where FUD and FOMO occur. With the continue fall in market prices the market user begins to become doubtful that market prices may not rise again which brings uncertainty and fear. This fear or uncertainty causes the market user to sell assets at this time causing the user great loss and later regrets when the prices begin to rise again. This is an instance where FUD occurs. FOMO occurs where market prices start to rise and the market user start to get high hopes that the market will continue to rise and this may cause the user to buy assets at the point where the market price is at is highest peak. Users who buy at this point with the aim of making double profits will incur a great loss when market prices start to fall.

CONCLUSION
To conclude with, market users should carefully study the bullish and bearish cycle of the market without falling pray to FOMO or FUD. These two things are actually not a good thing that any market user should be caught by them, and it is mostly as a result of fear and greed. Thanks for reading my post and I hope you guys liked it. @emnikmeguel , @jebobli , @abudooji I invite you guys to join this program.