The cryptocurrency community has endured one of the most volatile and challenging weeks in recent history. For example, Bitcoin rose from $100,000 last Saturday to over $108,000 by Tuesday, hitting a new record, but then fell $16,000 to a multi-week low of $92,000 after the Fed's harsh comments about 2025.

It has since recovered by about seven grand and is now close to $100,000 again. In addition to causing billions of dollars in liquidations from over-leveraged traders, these extreme swings have played on many people's emotions, with many wondering if the bull cycle is over.

The Fear and Greed Index, a metric that measures the overall sentiment in the crypto market towards BTC and altcoins, has dropped from a deep “extreme greed” of 87 to just “greed” of 73 in the space of a couple of days. Such large differences only highlight the emotional part of the ever-volatile crypto market. However, if you zoom out a bit, it’s a matter of perspective.

The Emotional Part

Obviously, we can’t eliminate emotion from anything; otherwise, we wouldn’t be human. Financial markets are no different, especially cryptocurrencies, due to their massive price swings. You can’t just turn off your emotions when you see your portfolio go up or down by double digits in a day or two.

Julian Hosp, CEO of Bake, took to social media after the correction to emphasize the importance of emotion as well as perspective. He believes that the most important part of people’s perspective is the direction, not the actual numbers.

“Here’s the crazy thing about crypto: It doesn’t matter if Bitcoin is at 30k, 60k, or 100k — it’s all about direction. Price going up? Everyone’s euphoric: 90k to 100k? Amazing. 108k to 100k? Disaster. Same price, completely different emotions.”

Let’s analyze what happens during these huge green or red candle periods. When the price of BTC jumps to a new all-time high, euphoria sets in. Remember what happened in 2021? Bitcoin jumped to $70,000, and people started expecting $100,000 immediately. And what happened next — BTC crashed and entered a year-long bear market.

Fear dominated this period, especially when previous industry giants like FTX and Celsius went bankrupt. Things changed again in 2023, when BlackRock applied for a spot in a Bitcoin ETF, which essentially guaranteed that the US SEC would finally greenlight such products. The same thing happened when Donald Trump, who had made numerous pro-crypto promises during his campaign, won the election and BTC started to rise.

The asset actually started to go above the coveted line, and the aforementioned euphoria began. People celebrated when it reached $100,000, but then it reached $108,000 and returned to $100,000 - this time the general mood was not so optimistic, although two years ago it seemed impossible to reach this level.

Mirror of Emotions

Hosp concluded that the crypto market is “a mirror of emotions: greed, heroism, hope - it’s all about the feeling of where the market is going.”

He noted that the ultimate utility is the price itself, and rationality goes out the window when that price and trends “dominate the facts.” He added that big green candles “create more hype than any real numbers.”

We know that it’s impossible to leave emotions at the door when dealing with finance, especially cryptocurrency. However, it’s important to step back during sharp corrections like this week and look at the big picture — is your portfolio better now than it was a few months/years ago? If so, stay calm and keep doing what you’ve been doing. If not, you need to analyze what went wrong and how you can improve.

💸💲🧠 Get up to 5020 USDT as a welcome bonus and an additional 1025 USDT by using this referral on  Bybit