infographic – Crypto Euphoria: How Collective Psychology Shapes Market Bubbles and Crashes (2025 Guide)

Jesús Montalvo

November 6, 2025

Infographic: Crypto Euphoria 2025

Crypto Euphoria (2025 Guide)

How Collective Psychology Shapes Market Bubbles and Crashes.

The Cost of Collective Psychology

The crypto universe is a living experiment of our most primitive emotions: hope, greed, and fear. According to the Bank for International Settlements, the result is clear: the vast majority of retail investors, driven by these behavioral patterns, fail to make a profit.

80%

Of retail investors have lost money in the crypto market.

This guide analyzes how collective euphoria and FOMO (Fear Of Missing Out) are built, and what tools exist to prevent the same emotional cycle from repeating.

The Anatomy of a Crypto Cycle

The market moves in predictable cyclical phases. The impulse to act because “everyone is doing it” replaces rational analysis, creating a repeating pattern.

1.

Accumulation

Experienced investors (“whales”) buy while the general public remains on the sidelines.

2.

Euphoria

Prices surge, enthusiasm is contagious, and FOMO takes hold of the market.

3.

Distribution

Initial investors sell their assets to late participants, attracted by the euphoria.

4.

Despair

Panic spreads, massive sell-offs intensify the drops, and the cycle ends.

History of Peaks and Crashes

This cycle has repeated with surprising regularity. From the ICO boom in 2017 to the geopolitical tensions of 2025, human psychology remains the most defining factor, wiping trillions of dollars from the market in each collapse.

The Losses Behind the Enthusiasm

The real impact falls on the common investor. During the “crypto winter” of 2022, the average retail investor suffered significant losses, wiping out nearly half of their invested capital on average.

Psychology of Euphoria

During euphoria peaks, herd behavior intensifies. Overconfidence and optimistic predictions cloud judgment, leading to impulsive decisions. When the market reverses, panic spreads with the same speed.

Overconfidence

Continuous positive returns generate a false sense of invulnerability.

Herd Behavior

Investors imitate the majority, disregarding critical thinking.

Reverse Panic

Massive sell-offs, motivated by the fear of losing everything, intensify the drops.

Lessons from Previous Crashes

Every crash has left clear lessons. Overexposure to volatile assets and the use of leverage are recurring mistakes that generate massive losses.

  • Excessive Leverage

    In 2025, the massive liquidation of leveraged positions generated record losses.

  • 📉

    Overexposure to Altcoins

    In every crisis, speculative altcoins suffer drops of 60% to 80%.

  • 👨‍👩‍👧‍👦

    Blindly Following the Crowd

    What seems like consolidated consensus is often a temporary illusion.

Strategies to Survive 2025

In an environment of geopolitical tensions and restrictive monetary policies, the key is discipline and calm preparation.

  • Establish Clear Rules

    Base entry and exit decisions on data, not emotions.

  • 📚

    Continuous Education

    Use reliable sources to make informed decisions.

  • Long-Term Vision

    Thinking in terms greater than three years increases the probability of success.

  • 🚩

    Identify Bubble Signals

    Disproportionate media interest and exaggerated promises are clear warnings.

True financial freedom stems from awareness. Major losses come not just from asset volatility, but from the emotional volatility of the investor.

Data based on the report “Crypto Euphoria (2025 Guide)”.

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