Investigating herd behavior in the digital currency market

Subject Areas : Financial and Behavioral Researches in Accounting

gholamreza askarzadeh ^{1 *} , amin roohi ²

1 - islamic azad university if yazd
2 - department of finance.islamic azad university.yazd.iran

Received: 2023-02-20 Accepted : 2023-03-20 Published : 2023-03-20

Keywords: herd behavior, Behavioral Finance, digital currency market, Bear Market, Bull Market,

Abstract :

The purpose of this research is to investigate herd behavior in the digital currency market. Considering the important role of herd behavior in the digital currency market and its effect on the price of cryptocurrencies, this study focuses on mass behavior in digital currency markets, because this herd behavior causes the direction of the market to change, so for the trader and investors, it is important for what reasons this herd behavior occurs. Bitcoin has been the largest cryptocurrency invested over the past decade, and mass phenomena in cryptocurrency markets are largely attributed to its price volatility. The data analysis method is linear regression, and the statistical population is currently the top 500 cryptocurrencies based on the project, and in this research, the top 200 cryptocurrencies based on their market value in the digital currency market, which have the greatest impact. on the market and cause herd behavior in the digital currency market has been selected in the period of 2019 to 2022. The method of collecting information has been done using the library method, by checking the Coin Market Cap website and Latin articles. Cross-sectional absolute standard deviation (CSAD) has been used to measure and test hypotheses. The results of the research show that the intensity of herd behavior in the bull market is higher than in the bear market, and there is also herd behavior in the cryptocurrency bull market.