Devenez Insider

Psychology for you!

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Wednesday, June 22, 2022

For Nicolas Chéron, market strategist at Zone Bourse, the cryptocurrency downturn is a real test for investors.

If there's one thing that hasn't changed in a century on the financial markets, and which has fascinated me in recent years, it's the psychology of investors. "Buy fear, sell greed", as Warren Buffet is wont to say. The concept is simple: you buy when everyone is scared, when the players are in a state of total depression and are exiting in capitulation, and you sell when euphoria follows optimism in a parabolic uptrend.

Translated to cryptos, this concept can be transposed according to the following formula: you buy to the sound of anti-crypto jubilation, when brokers get hacked and when big youtubers get their accounts liquidated because of 80% falls. And we sell when 15-year-old teenagers explain on TikTok how to make money, with gigantic leverage, on an unregulated platform that was advised to them by a business introducer during a "personal development" evening in Dubai.

I didn't think this concept could be taken to such an extreme on cryptos. And the last few years have allowed me to see that by reading the comments on social networks, the general atmosphere, the excesses of optimism or pessimism, you could detect price zones of importance where a turning point could take shape. This was the case with the 'double top' at $65,000 in November 2021, when targets of $200,000 were springing up here and there. And it's still the case right now, as regulators, media and anti-cryptos point to (or celebrate) the deflation of the bubble.

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Cette analyse n'est pas un conseil en investissement. Elle a été rédigée sans prendre en compte votre situation personnelle et notamment votre situation financière, votre profil de risque et vos objectifs d’investissement.

Avant d’investir dans un produit, l’investisseur doit comprendre entièrement les risques et consulter ses propres conseillers juridiques, fiscaux, financiers et comptables.

Cet article est réservé aux abonnés insiders.

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