Euphoria
Excessive emotional state that leads to impulsive, uncritical investing.
Beginner-friendly explanation
Euphoria is when everyone believes the market will keep going up forever. You feel excited, afraid of missing out, and buy quickly — often leading to poor decisions.
Example:
You see a crypto double in two days. Everyone talks about it online. You buy without thinking… and it crashes the next day.
Intermediate-level insight
Euphoria is a psychological phase marked by overestimation of market prospects. It is amplified by herd behavior, influencers, and FOMO (Fear Of Missing Out). It leads to overinvesting, ignoring risks, and entering trends too late.
Example:
During a bull run, investors massively buy altcoins with no analysis. This euphoric phase often precedes a sharp correction.
Advanced perspective
Euphoria is a classic end-phase of bullish cycles, illustrated in the market emotion curve. It reveals a disconnect between price and fundamentals, and shows through: surging volume on risky assets, excessive leverage, irrational behaviors (buying at any price, “guaranteed profit” promises). Experienced traders look for euphoric signs to reduce exposure or take profit.
Example:
In late 2017, BTC surpassed $19,000 amid retail buying frenzy and media hype. Euphoria signs were clear: extreme volumes, peak Google Trends, stories of easy wealth.
Psychology & Behavior
euphoria, FOMO, bull market, excess, emotion, irrational behavior, overinvesting, herd effect