how narratives are the real liquidity engines of markets.?
Fear phase → price dips, sentiment collapses, people overreact.
Narrative phase → influencers, traders, media push stories like “buy the dip”, “inverse head & shoulders”, “whale accumulation”.
Feedback loop → enough participants believe it, liquidity returns, and that belief itself nudges price upward.
Self-fulfilling effect → the narrative becomes “true” because people acted on it, not because fundamentals changed.
In crypto especially, where valuation is hard to pin down, narratives become temporary fundamentals. They drive liquidity, shape sentiment, and often turn into self-fulfilling prophecies. Markets run less on certainty and more on collective storytelling. In crypto especially, where fundamentals are harder to measure, memes narratives = temporary fundamentals.