FOMO (fear of missing out)

FOMO is a behavioral pattern rather than a market mechanism. It typically appears when a coin posts large daily gains, reaches a new all-time high or dominates social media, and investors who stayed out feel pressure to jump in before the move ends.

Because FOMO buyers tend to arrive late, they often purchase near local peaks and absorb the losses when early holders take profits. Memecoins and newly listed tokens are especially prone to these cycles, where sharp rallies are followed by equally sharp corrections.

Common defenses include setting entry rules in advance, using dollar-cost averaging instead of lump-sum purchases and sizing positions so that a sudden reversal does not cause serious damage. FOMO and FUD are often described as the two emotional extremes of crypto markets.