Froth

In financial markets, froth refers to a period of excessive speculation, inflated asset prices, and irrational investor behavior—often a warning sign of a bubble. In crypto, froth emerges when coins or tokens experience rapid price spikes fueled more by hype than fundamentals.

Spotting Froth in Crypto Markets

Signs of froth include surging trading volumes, meme coin mania, or widespread social media buzz about unrealistic gains. These conditions often precede sharp corrections or market crashes, making it important for investors to stay grounded in research.

Why Investors Should Be Cautious

Understanding froth helps traders avoid emotional decisions driven by hype. Recognizing when a market is overheated can be the difference between profit and painful losses.