Broadly, it describes a situation where people get under pressure of the mere notion of missing out on an opportunity. Many people rush to buy a cryptocurrency at its all-time high (ATH), and then on the sign of any price drop they get overwhelmed with the need to sell and get away, drifted by a wave of panic selling. In short, a fear of missing out situation involves a combination of market entry at ATH, price reversal later on, and panic selling.

It is usually advisable that market participants avoid such a “herd mentality”, and invest only when there are objective market indicators about the right time of entry and exit.