How emotions impact Bitcoin's price

Intro bitcoin's price is determined based on emotions like fear and greed most people are pretty much fearful or greedy at all times when it comes to any kind of savings or Investments or money in general and because of this we see how much bitcoin's price is constantly fluctuating in this video I want to talk more about how emotional investors impact the price of Bitcoin and how over time we're going to constantly see the Bitcoin price move up and down because of fear and greed let's get started Bitcoin price movements started the very first thing that I want to talk to you about here is bitcoin's price we can see here that there are massive moves up then massive moves down massive moves up then massive moves down same thing pretty much all the way through if we zoom into some of the earlier charts we can see here that in November 2013 bitcoin's price went all the way from about $200 to $1,170 it increased six times in one month over time Bitcoin has remained volatile but we can see that the movements aren't as big anymore so for example we can see here that bitcoin's price moved from this is a massive candle right here we can see here that bitcoin's price moved from $1,610 all the way up to 29,000 it barely doubled in that period but over time we can see that emotions do have an impact on the market when retail How retail investors react to price investors see bitcoin's price starting to go up and up and up they start buying they think that oh I don't want to miss out I don't want to be the only person who misses out when Bitcoin is at a million dollar $10 million $100 million I need to get in ASAP the reason why they do this is because they see Bitcoin as a gamble to them Bitcoin is a way to get rich quick all they want to do is they want to buy Bitcoin and retire early and they don't want to research what Bitcoin is they don't want to put in the time just like pretty much everything else most people want a quick reward without any work they don't want to put in the time they don't want to put in the effort to understand how Bitcoin works or to understand how a business works or to understand how the real estate market works all they want is a way to make quick money quick and easy money so they see these they see these movements they see these movements up and they think this is easy I can go from having $10,000 to having $65,000 in just a few months and at the top here I'm going to sell and then at the bottom here I'll buy again and at the top here I'll sell but the thing is that most retail investors they don't know what they're doing they see these charts they get very they they get very confident in their ability to pick the tops pick the bottoms because they can easily see how the tops and bottoms work so where I'm going here is that most retail investors are going to ignore Bitcoin during these sideways movements so right now we see so many retail investors are thinking Bitcoin is going to zero thinking that Bitcoin is going to be worthless and we can Fear and greed index actually see that from the crypto fear in GRE readed index I mean I think this is the Bitcoin fearing greed index but we can see it from here that most people are fearful this is the bit the Bitcoin uh Market sentiment analysis right now we're in fear last month we were in greed just a month ago we were in greed we were at 74 right now we're at 30 so what this shows you is that most retail investors are trying to predict where the price is going based on the current market movements they're trying to see where the price is going to go in 10 15 20 years based on where the market is right now they think that because bitcoin's on a downtrend because we can clearly see here that we have lower lower highs lower lows they think Bitcoin is going to zero they think it's going to go all the way I I've actually had conversations with a lot of people who think that Bitcoin is going to zero and the bubble is popping and it's deflating but they have no real clue about how Bitcoin actually works so when people What is emotional investing? invest emotionally they go based purely on price they don't actually care to look past the price most people are exactly like this I regularly get comments from people who are saying that Bitcoin is down 3% how are how is this a store of value but you also see that Bitcoin is up 50 60% sometimes in a single month so what retail investors do is they look at the last 6 months for example we can see here Bitcoin is pretty much just moving down over the last 6 months it's moving sideways or it's moving down down we are seeing some lower lows here and that's perfectly fine when you're a logical investor when you're not using emotions you don't really care about the sideways movements here and there you know that these movements are specifically designed to get people shaken out of the market they're specifically designed to bore you to death so that you sell so that you don't keep holding so that when you see bitcoin's price go from 73,000 all the way down to 61,000 you think oh it's over let me sell you sell and then when the price goes back up to 72,000 you think oh I was wrong I need to start buying again so you start buying and then when the price goes back down to 56,000 you think wow I was wrong I was so wrong I need to sell I need to get rid of this thing this is how these markets move this is exactly how these markets are designed to move they're Whale selling and buying designed to bore the people who don't understand what Bitcoin is because there are a small group of holders who have a lot of Bitcoin and they can pretty much control where the market Market are going they can sell or they can buy they can sell or they can buy they can also distribute what they have if they make the wrong moves let's say for example a whale sells a ton of Bitcoin because they think that markets will be emotional and if they trigger a sell the price will go much much much lower and they can now buy back at a lower price but if that doesn't happen these whales are pretty much stuck they lose a ton of Bitcoin they lose a ton of money and then they have to recover it again so they have to trade through the market again and the crazy crazy thing here is that most retail investors actually fall for this when they see the price dropping 3 to 5% when they see this kind of drop here when they see the price dropped to 49,000 they think it's going to 40,000 they think it's going to 4,000 they think it's going to zero but when bitcoin's price drops to those levels these retail investors are nowhere to be found for example in January 2023 the market was bored we were just moving sideways we were pretty much doing nothing bitcoin's price went from $1 17,6 71 in June 202 2 all the way down to $1 16,33 in January 2023 these are the periods where these retail investors who are just purely reliant on emotions this is where they sell this is where they get rid of their generational wealth they get rid of their opportunity of ever being able to build wealth with Bitcoin and this is what hurts most retail investors when the price is moving sideways if you don't understand the asset you own you're always fearful you're always worried you're you get bored quickly you just keep thinking that this thing is going to suddenly drop and I need to get rid of everything as quickly as I can just so that I can pay my expenses pay my debts and this is when retail investors sell their generational wealth the bottom right here we can if we zoom in the bottom here is formed when everyone is done selling so $5,385 some person out there sold at $5,385 thinking that Bitcoin is going to go to $10,000 or $5,000 or $3,000 or something along those lines maybe they were liquidated by some kind of trading algorithm or maybe they used massive leverage to buy here and their leverage just got them liquidated down here they made some mistakes they made some error in their judgment and now they sold their Bitcoin at the lowest price recorded in something like four years or not four years two years here you can see here November 20 2020 the Bitcoin price was at that exact price you see that that's pretty cool but somebody sold here somebody got rid of their Bitcoin somebody got rid of their generational wealth they sold it to Black Rock they sold it to me they sold it to some other retail investor they sold it to Michael sailor these Market sentiment is usually wrong sentiment indicators are usually completely wrong because most retail investors have no idea what they're doing they're just buying and selling based on emotions so we can see here just as an example this was a recent move August 6th 2024 the crypto fear and greed index was at 17 now let's take a look at the price August 5th was the lowest price that it had been in a very long time we can see here it wasn't lower than this for at least a few months the last time Bitcoin was at $50,000 was in February of 2024 so these people may have maybe bought here maybe they bought near the top and they got tired of holding they thought this thing is going to the Moon right away and instead of holding instead of trying to figure out what they hold they got rid of it and they sold at the bottom because they just got scared they got worried that this thing is going to zero Conclusion so back to the question here how do emotional investors impact bitcoin's price they make the price extremely volatile when the price is dropping they sell and they make the selling even worse they make the price drop even more when the price is going up they buy and they make the price go up even more so they make it more volatile they mostly just trade based on what they think they don't trade based on what they know keep in mind that I was very emotional in the beginning as well I wanted to buy when the price was going up I want to sell when the price was going down when you don't understand an asset this is completely normal the goal here is to hold on for as long as you can to figure out where this thing is going to try to learn what it is and the best way to do that is to understand the fundamentals if you want to learn more of the fundamentals of Bitcoin and why I think it's going to millions of dollars watch the video on your screen