What does "psych out" mean?

Analyze or understand something; also, anticipate the intentions of someone, as in It's hard to psych out the opposition's thinking, but we have to try.

Undermine the confidence of, intimidate. For example, The basketball team managed to psych out their opponents' guards. This expression is often used in the passive and can mean “lose one's nerve,” as in After I learned that he had two doctorates in the field, I was completely psyched out. Both slangy usages date from the second half of the 1900s and allude to influencing someone psychologically.