I don't know about the psychology, but as I said before, diversifying is about reducing risk, but reducing the potential return as well.

In classical investment theory, one must diversify to avoid losing everything. If you put your money in shares of a single company, there is a very high risk that you will lose it all, even if the company is a good one. However, if you divide your investments among several stocks, properties, commodities, etc. you reduce the risk a lot.

In the crypto world this seems silly to me, as all alts have been proven time and time again to lose against Bitcoin in the long run. The only more or less solid contender is shitEthereum. There are many fancy alts that promise they are going to be the next Bitcoin but just as quickly go up as they go down.

I would recommend you diversify but into other assets. If buying crypto buy Bitcoin, and if anything a bit of Eth or some other you trust (lol) and if you want to diversify more, buy stocks, mutual funds, RE or commodities.