FOMO (Fear of Missing Out) drives traders to enter the market late, usually after a big price rally, because they’re afraid of missing further gains. It often leads to buying high and suffering in corrections.
Example:
Bitcoin rallies from $100,000 to $120,000 in a week. A trader buys in at $120,000 because of FOMO, only to see the price dip back to $108,000 shortly after.