CRYPTOCURRENCY MARKET BEHAVIOR: AN ANALYTICAL STUDY WITH IMPLICATIONS FOR RETAIL TRADERS AND INVESTORS

This study examines cryptocurrency market behaviour during crash conditions and evaluates the extent to which structured risk management techniques and behavioural biases affected financial losses. The study employs a quantitative design that is bolstered by qualitative observations. A structured questionnaire was used to gather primary data from (111) retail cryptocurrency traders. In order to obtain a deeper understanding of behaviour, (12) active cryptocurrency market traders were interviewed for qualitative analysis. The relationships between behavioural biases, social media influence, risk management techniques, and financial losses were examined using one-way ANOVA and Pearson correlation analysis. The results show that emotional biases like panic selling, overconfidence, FOMO, and frequent short-term trading greatly increase financial losses. A majority of respondent groups’ trading decisions were found to be influenced by social media sentiment. Most significantly, correlation analysis confirms that disciplined strategies significantly lower the magnitude of losses during times of high volatility by showing a strong negative relationship between structured risk management practices and financial losses.