Hamsters is a slang term widespread in the crypto community for beginner and inexperienced market participants whose behavior depends heavily on emotions and mass sentiment. Such players tend to buy an asset on the wave of general hype, when the price is already close to its maximum, and to sell it in a panic during a decline, locking in losses at the least favorable moment. It is precisely their actions that often turn out to be the opposite of a sound strategy.

The term is closely tied to the concepts of pump and dump. The organizers of an artificial price surge (a pump) count on hamsters joining the buying at the peak, after which a sharp dumping of the asset (a dump) follows. Two types of behavior are conventionally distinguished:

• The hamster trader — makes frequent trades, enters at highs, and closes at lows under the pressure of panic.
• The hamster investor — acquires assets impulsively, without analyzing the project or fundamental factors.

The main reason for such behavior is the lack of discipline, a plan, and an understanding of market mechanisms. To avoid ending up in the role of a hamster, it is important to rely on your own analysis, to define entry and exit points in advance, and not to give in to the crowd effect.