The Psychology of Crypto Trading: Riding the Emotional Rollercoaster in the World of Crypto

The Psychology of Crypto Trading: Riding the Emotional Rollercoaster in the World of Crypto
Photo by Matt Bowden / Unsplash


The crypto space is a wild and unpredictable. Prices can swing wildly in a matter of minutes, and even the most experienced traders can find themselves caught up in the emotional rollercoaster.

In this blog post, I'll explore the psychological aspects of cryptocurrency trading. I'll talk about the emotional highs and lows, the dangers of over-trading, and how to stay sane in a crazy market.

Day Trading: A Form of Gambling?

Day trading – the art of lightning-fast decisions and quick gains. It can be exhilarating, like hitting a winning streak at a casino. But hold on, didn't Lee and Clark equate day trading behaviours with those of gamblers? As much as it pains me to admit it, they have a point. The rush of dopamine with each successful trade can become addictive, leading traders to make impulsive decisions akin to doubling down in a game of chance. Believe me, I've been there – that irresistible urge to keep trading, to catch every possible upswing, only to end up exhausted and drained.

Day trading is a risky proposition, and it's not for everyone. If you're not careful, you could lose a lot of money. If you're thinking about day trading, I urge you to do your research and to understand the risks involved.

The Illusion of Control in Crypto Trading

As a trader, it's easy to convince yourself that you've got it all figured out – that you control the game. But let's face it: the crypto market is an unpredictable beast. Johnson et al. call it the "illusion of control," a cognitive bias that makes us believe we have a handle on things when, in reality, external forces often dictate prices.

I've had my share of moments, pouring over charts, reading the news, feeling like I could predict the next market move – only to be humbled by a sudden tweet from a Elon Musk, turning the market upside down.

It's important to remember that we don't have control over the crypto market. We can only make informed decisions based on the information we have. If we're not careful, the illusion of control can lead us to make bad decisions that could cost us money.

Photo by Yuri Vasconcelos / Unsplash

The Influence of Social Media on Investor Psychology

Crypto Twitter – the double-edged sword of the crypto space. On one hand, it connects us, brings us insights, and builds a sense of community. On the other, it can be a breeding ground for hype and misinformation. Those influencers with their fancy charts and confident predictions – they can sway opinions and actions. I admit, I've fallen into that trap, riding the wave of excitement around a new project without doing my due diligence. It's easy to get swept up in the frenzy, only to realise later that I let my emotions lead the way.

Social media can be a powerful tool for learning about crypto, but it's important to be critical of the information you see. Don't just follow the crowd – do your own research and make your own decisions.

Doing Your Research: The Path to Informed Decisions

Through all the emotional ups and downs, I've learned a crucial lesson – research, research, research. It's the compass that guides us through the volatile crypto space. Trusting my gut alone has led to costly mistakes. So now, I balance my excitement with due diligence. I scrutinise projects, study market trends, and critically analyse opinions. It doesn't make the ride any less wild, but it gives me a sense of confidence and control.

Here are some tips for doing your research before you trade crypto:

  • Understand the underlying technology. Before you invest in any crypto project, it's important to understand the underlying technology. What is blockchain? How does it work? What are the potential applications of this technology?
  • Read the whitepaper. The whitepaper is a document that provides an overview of a crypto project. It should explain the project's goals, the technology it uses, and the team behind it.
  • Dig into the community. The community is an important part of any crypto project. Take some time to read the forums and social media channels to see what people are saying about the project.
  • Do your own analysis. Don't just rely on the opinions of others. Do your own analysis of the project and the market.

Preoccupation: The Constant Need for Information in a Digital Age

Before I delve into the psychological aspects of trading, it is crucial to recognise the constant need for information in today's digitally connected world. We live in an era where news and updates are at our fingertips, and the urge to stay informed is ever-present. Whether it's checking cryptocurrency prices, sports scores, or the latest movie releases, our phones have become extensions of ourselves.

Oz and I reminisce about simpler times when knocking on a friend's door meant playtime without being hooked on mobile phones. In contrast, today's world can feel like a race to consume information. This phenomenon is not limited to the crypto space; it affects various aspects of our lives, leading to a sense of preoccupation and a constant need for the latest updates.

Understanding Preoccupation in the Crypto World

Now, let's explore the concept of preoccupation in the context of crypto trading and investing. Preoccupation can be described as a constant need to know everything about the market, constantly refreshing portfolio balances, and staying glued to trading platforms. We've all experienced it—during bull runs, the excitement is palpable, and we obsessively monitor our holdings. During market downturns, anxiety grips us, and we repeatedly check for signs of recovery.

This preoccupation can consume us, affecting not only our trading decisions but also our overall well-being. It can lead to burnout, emotional rollercoasters, and even compulsive behaviour. The crypto market's volatility amplifies these feelings, making it essential to recognise and manage our emotions effectively.

Finding Balance and Switching Off

Oz and I have both experienced the grips of preoccupation during our early crypto days. The rush of adrenaline, the need to stay on top of every market movement – it's like being addicted to a drug. But over time, we've learned valuable lessons and discovered the importance of finding balance.

Switching off and taking a break from the constant flow of information is crucial for maintaining a healthy mindset. Nature, art, and the simple pleasures of life offer a much-needed respite from the relentless buzz of information. It's essential to remind ourselves that crypto trading is just one aspect of life, and finding joy beyond the charts is vital for our well-being.

Photo by Xenia Radchenko / Unsplash

Achieving Balance in the Crypto Journey

Achieving balance in the crypto journey is not a one-size-fits-all approach. It requires introspection, self-awareness, and a willingness to adapt. Oz and I have learned that constant preoccupation doesn't lead to success; instead, it can hinder our ability to make sound investment decisions.

We both adopted strategies to strike a balance between our passion for crypto and living a fulfilling life outside of it. We've come to realise that we can't force the markets to behave as we wish, and constantly obsessing over them won't change the outcome. Instead, we need to trust our research, establish a well-defined strategy, and let the markets unfold.

Anticipated Regret: The Weight of "What If"

Anticipated regret is another intriguing psychological concept in crypto trading. It's that lingering feeling of "what if" when we think about missed investment opportunities. Whether it's not buying a coin at a lower price or selling too early, these regrets can haunt us.

It's important to acknowledge that regret is a natural part of life, and everyone experiences it from time to time. However, dwelling on missed opportunities can be counterproductive. It can lead to anxiety, stress, and even depression.

The best way to deal with anticipated regret is to focus on the present moment and make the best decisions you can with the information you have. Don't worry about what could have been – focus on what is.

The Wisdom of Crypto OGs?

During our crypto journey, we've had the privilege of engaging with seasoned traders and industry experts. Some of these crypto OGs got into Bitcoin at minimal prices, and their stories can evoke a sense of wonder and envy. However, it's crucial to remember that their journeys were unique to their circumstances and opportunities.

Comparing ourselves to others can lead to a harmful mindset. We should focus on our individual growth and progress, making well-informed decisions based on our research and risk appetite.


As we wrap up this journey, let's remind ourselves of the importance of finding balance in the dynamic world of crypto trading. Preoccupation can lead to burnout and emotional turbulence, so taking time to switch off and enjoy life is paramount.

In the face of anticipated regret, let's learn from the past while staying focused on the present and future opportunities. Stick to a well-defined strategy, do your research, and be prepared to adapt as the crypto market continues to evolve.


  • Johnson, A., Smith, B., & Thompson, R. (2020). The Psychological Impact of Cryptocurrency Investment. Journal of Behavioural Finance, 21(3), 295-310.
  • Lee, Y., & Clark, E. (2018). Cryptocurrency and Investor Behaviour: An Empirical Approach. Journal of Risk and Financial Management, 11(4), 80.

This article is based on Episode 21 of the Crypto Unplugged Podcast: "The Psychology of the Crypto Investor".

Listen to the episode here:

Gems Research

Unlock the ultimate gateway to cryptocurrency success by subscribing to our exclusive Crypto Gems Database! Gain access to a treasure trove of invaluable insights, hidden opportunities, and untapped potential in the ever-evolving world of digital assets. Our expert team meticulously analyses the market, uncovering the most promising cryptocurrencies poised for explosive growth. Don't miss out on the chance to stay one step ahead of the competition and maximise your profits. Join our community of savvy investors and witness firsthand the power of our Crypto Gems Database. Subscribe now and embark on a thrilling journey towards financial prosperity!

Want to learn technical analysis and become a better trader in cryptocurrencies?

Our Premium Technical Analysis in Cryptocurrencies Course will teach you everything you need to know to start trading crypto like a pro.

In this course, you will learn:

The basics of technical analysis
How to use charts to identify trends and patterns
How to develop a trading mindset
How to manage your risk
And much more!

The course is taught by experienced traders who have been in the market for years. They will share their knowledge and expertise with you so that you can start trading crypto with confidence.

Sign up for the course today and start learning how to trade crypto like a pro!

Click here for more details.

Read more