Are crypto markets reaching a state of euphoria and triggering intense FOMO (Fear Of Missing Out)? The question is on the minds of many investors as Bitcoin and other cryptocurrencies experience volatile price swings. According to crypto analysis firm Santiment, the markets might be entering a stage of euphoria and FOMO (fear of missing out). The firm bases its argument on current market behavior and specific on-chain metrics.

But what exactly does "euphoria" mean in the context of crypto, and how does it relate to FOMO? The Euphoria Stage signaled excessive market optimism, typically followed by substantial corrections. This phase is characterized by investors throwing caution to the wind, driven by the fear of missing out on potential gains.

This article explores whether we\'re genuinely in a state of unsustainable euphoria or if the current market activity is simply healthy volatility. We\'ll consider various viewpoints, including those that emphasize the risks associated with FOMO-driven investing. In this article, we delve into the psychological underpinnings of crypto investing, explore how FOMO and FUD impact decision-making, and discuss strategies to navigate these emotional tides.

One critical aspect of identifying euphoria is understanding its relationship with risk appetite. These metrics aim to capture the level of fear of missing out (FOMO) and capital allocation to riskier segments of the crypto universe. According to Needham, the level of risk investors are willing to take often correlates with the perceived opportunities for quick profits during a euphoric phase.

The Bitcoin market, in particular, provides valuable insights. Using a longer sample period covering the COVID-19 pandemic, our results show evidence of positive asymmetric volatility behavior in the Bitcoin market, confirming the potential for rapid price increases followed by equally swift corrections. This volatility reinforces the need for cautious investing, especially when FOMO is prevalent.

Currently (as of March 2025), Bitcoin has entered the conversation around market sentiment, and it\'s important to regularly assess the market\'s temperature against historical data.

Ultimately, discerning whether crypto markets are genuinely in a state of euphoria fuelled by FOMO requires careful analysis, a healthy dose of skepticism, and a robust understanding of market psychology. Investing based solely on fear of missing out is a recipe for potential losses. Diligence and research are crucial.