Markets tend to over-optimize. That's why I warned caution when many were saying the Cambridge Analytica scandal didn't harm Facebook, even though it was obvious FB was being quite misleading about what was actually impacted at the time and about the fact that their good results were actually given by the stuff that had happened before Cambridge Analytica.
Over-optimization means that even when a string of bad news hit, the stock may not change much because of the previous string of good news still having inertia and the market "not really believing" the new bad stories. But eventually the market sentiment changes, and then it all comes crashing down, and now the bad news are over-optimized, and the good news become irrelevant. And the cycle repeats itself.
This is harder to see with stock because it tends to happen over a multi-year span, but it's much easier to see with cryptocurrencies where this happens over a several months period.
Over-optimization means that even when a string of bad news hit, the stock may not change much because of the previous string of good news still having inertia and the market "not really believing" the new bad stories. But eventually the market sentiment changes, and then it all comes crashing down, and now the bad news are over-optimized, and the good news become irrelevant. And the cycle repeats itself.
This is harder to see with stock because it tends to happen over a multi-year span, but it's much easier to see with cryptocurrencies where this happens over a several months period.