Cryptocurrency HODLers have been experiencing an extremely painful bear market since the beginning of the year. Most crypto markets are down close to 90% and hopes for a bull run are dwindling. Inspired by a meme posted on the CryptoCurrency subreddit, here are the five stages of a bear market:
The first stage of a bear market is denial that the bull run is over. No matter how clear the technical indicators are about the end of the bull run, traders freeze up and go numb. As you start doubting your decision to keep HODLing you are subconsciously starting the process of coming back to earth from a trip to the moon.
Relative to the current bear market, in Bitcoin’s case the Denial stage happened around January of 2018. After hitting the ATH of $19,000 and dropping to a low of $12,000, prices quickly rose back up to the $18,000 levels giving traders false hope.
After the bears bamboozle you into keeping your bags, the market starts to drop significantly and quickly. As you see your investment lose its value day after day, you can’t help but get angry. You ask yourself, “Why is crypto going down?” “Why didn’t I sell earlier?” “Why is everybody selling?” This is where you may end up rage quitting crypto by dumping all your bags and cutting your losses, only to find out you sold at the bottom.
In Bitcoin’s case, the anger stage came right around February of 2018, when the cryptocurrency hit a low of $6,800. A 65% drop in a matter of 2 months is no walk in the park.
As the market corrects upwards, FOMO takes over any rational thinking and you start the third stage of a bear market – bargaining. This is where you may end up loading up on more bags to make sure you don’t miss the inevitable bull run. After all, selling most of your cryptocurrency during the Anger phase left an emptiness in your heart which you needed to fill.
In Bitcoin’s case the bargaining stage happened right around March of 2018, when prices spiked to $11,000 after bouncing off the $9500 support.
When you realize crypto did you dirty by baiting you into selling at the bottom and buying at the top, you sink into full fledged depression. Reality smacks you in the face and you realize the good old days are over. You no longer check your portfolio as often and you stop giving a shit about cryptocurrencies. You think of all the Lambos you could have bought if you sold earlier and spend most of the day sleeping.
In Bitcoin’s case, the depression stage materialized itself around July of 2018. Prices were at a 7 month low and chances of recovery seemed low.
The final and least painful stage of the bear market is acceptance. This is where you realize that cryptocurrency is not only about speculating on the price. You realize there are some crypto projects with truly revolutionary and disruptive technologies and start seeing the potential that crypto has.
In Bitcoin’s case, the acceptance stage of the bear market is now. After trading sideways and bouncing off the $6,000 support for the past 4 months, traders no longer expect a new all time high anytime soon. You realize that there are still some challenges that cryptocurrencies have to overcome in order to gain true mainstream adoption.