It seemed impossible to stop Bitcoin in December 2017. Driven by both demand and emotion, it surged past $19,000 at an astounding rate. A few weeks after I saw a chalkboard in a Berlin café offering a discount for Bitcoin payments, the price had fallen. It wasn’t because the technology didn’t work, but rather because faith faltered.
Every significant rally is actually an emotional roller coaster masquerading as a market cycle. Quietly, even reluctantly, it starts. Because of their recollections of past crashes, investors continue to exercise caution. The launchpad is this initial skepticism. FOMO starts to simmer as soon as the price makes a convincing shift.
| Psychological Trigger | Role in Rally Cycles |
|---|---|
| Fear of Missing Out (FOMO) | Intensifies buying pressure as prices rise, creating self-reinforcing momentum loops. |
| Herd Mentality | Drives groupthink; investors follow trends rather than research. |
| Disbelief Phase | Early-stage skepticism delays entry, creating room for early movers. |
| Euphoria and Greed | Sparks speculative mania, often detached from fundamentals. |
| Panic and Fear | Leads to abrupt exits during downturns, compounding losses. |
| Media and Social Hype | Accelerates sentiment shifts through amplified narratives. |
| Institutional Signals | Build trust among hesitant investors, pushing fresh capital into the market. |
| Scarcity Events (e.g. Halving) | Spark anticipation and trigger bullish sentiment based on perceived limited supply. |
The fear of missing out is a visceral one. On social media, a friend posts a profit. New highs are predicted by a podcast host. Hesitancy abruptly gives way to action. FOMO accelerates rallies more quickly than any technical metric and is remarkably effective at igniting mass behavior.
Bitcoin didn’t just rise during the 2020 rally; it took off on narrative steroids. Tesla made a $1.5 billion investment. Decentralization was discussed by news anchors. Bullish charts featuring club music soundtracks were shared by TikTok creators. Conventional finance was no longer mocking. The change was not merely analytical; it was emotional.
Optimism had turned into euphoria by the beginning of 2021. Opportunity was reframed as risk. It became simple to justify greed. Professional and amateur investors alike started to repeat the same theme: “This time, it’s different.” In practice, it is rarely.
The reversal followed. Take a dip first. Then doubt. The tone of headlines then shifted. Panic struck, not instantly, but definitely. Selling spread like wildfire, much like buying had only a few months earlier. The rhythm of Bitcoin is defined by this contrast between irrational joy and irrational despair.
One theme emerges particularly clearly from observing several cycles: people learn slowly. Even seasoned professionals fall into well-known pitfalls. There is growing conjecture when a halving event occurs. The media is paying attention again. The same steps are repeated by the crowd.
During the 2025 rally, I recall reading a Reddit thread. After promising never to touch Bitcoin again, a user admitted to reentering the market. Their remorse had given way to hope, and hope to danger. We don’t trade coins, and that quiet admission encapsulated that truth. We exchange future-focused tales.
Scarcity has a role. Halving events serve as psychological benchmarks by reducing the amount of newly mined Bitcoin. They support the idea that values should be preserved. However, they are not the cause of price increases; rather, it is people’s perception that prices ought to rise. The force of that expectation alone is extraordinarily potent.
Social media sites exacerbate the situation. Markets can be moved by a single tweet. Someone’s investment journey begins with a YouTube video titled “$100K Prediction.” Information spreads quickly. Euphoria does the same. This perspective turns the media into a megaphone as well as a mirror.
Institutional actions also have a significant impact. It’s not just about access when a government authorizes a Bitcoin ETF or when a fund like BlackRock suggests exposure. It has to do with approval. These occurrences give cautious investors a sense of security, and many of them swarm in for yield rather than ideology.
Nevertheless, the market penalizes those who arrive late. Those who purchase near peaks frequently do so under duress, whether from peers, momentum, or the nagging fear that they will miss the “next big thing.” The rally feels safest at its riskiest, which is a cruel irony.
Additionally, external instability fuels bitcoin rallies. Bitcoin becomes important during uncertain economic times, whether brought on by inflation, geopolitical unrest, or mistrust of central banks. Untethered and robust, it is regarded as digital gold. Although this view may be idealistic, idealism can be especially strong during uncertain times.
Having observed these cycles for more than ten years, I’ve seen how investors romanticize their timing. They talk about intuition, but they frequently overlook the emotional prejudice that drives them. What really makes a difference is that bias. Though sentiment is decisive, charts are helpful.
The teacher is always the one who crashes. An estimated $170 billion was lost by investors due to panic-driven decisions during the 2022 correction. Many were unaware of what they held. Even more were perplexed as to why they were holding it.
However, markets bounce back. Gradually, then quickly, optimism rebuilds. New stories are told. New projects are started by developers. Efficiency is promised by tokenized assets and layer 2 solutions. Every innovation becomes a new cause for optimism. A strategic amplification of that belief creates the conditions for a subsequent ascent.
One thing has remained constant throughout: narratives play a bigger role in Bitcoin rallies than numbers. They mirror human behavior, including our aspirations, our tendency to take short cuts, and our vulnerability to crowd movement. Additionally, Bitcoin will continue to be cyclical as long as people are still emotional.
Those with perfect entry points are not the most experienced investors. They are the ones who are aware of their own actions. They don’t follow hype when they see it. They recognize fear but do not act upon it. Their advantage is in discipline rather than data.
The secret for anyone working with Bitcoin today or tomorrow is not to make price predictions. It’s identifying trends in people. Because every Bitcoin rally is a narrative, shaped by emotion rather than logic.
