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Blockworks’ founder claims crypto headed to ‘lifeless’ stage 3 bear market

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Blockworks co-founder Jason Janowitz identified three stages of the bear market, and said that we are currently in the second stage, when there is a sharp drop in prices. The market only stagnates and becomes depressed before picking up again, and those who don’t give up will be rewarded.

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He advised the community to remember why they started and be resilient in times like these.

Stages of a bear market

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Janowitz’s description of the three stages of a bear market primarily relies on Blog Post written in 2018 by Union Square Ventures co-founder Fred Wilson.

Stage 1: Relaxation

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Janowitz described the first stage as a spin-up where the market doesn’t feel bearish. Investors are excited and full of hope.

High levels of greed still persist after the previous bullish sentiment, assets remain above their support, and companies are doing well. At first, everything seems normal.

Stage 2: Forced Surrender

Stage 2 is when the bearish signs start to get violent. Excitation from the first stage turns into anger.

At this point, prices plummet and crypto critics begin the eternal chant of “I told you so.” The general mood becomes very negative – very quickly. Investors will prefer to sell stocks at the smallest price peaks.

Companies have to take measures to survive, such as downsizing. Those who rely on tokens for funding will have a particularly hard time.

Janowitz said:

“In Stage 2, diamond hands become forced sellers. They sell not because they want to, but because they have to. Celsius doesn’t want to sell – they might have to sell. There will be more foundations, companies and individuals like Celsius.”

He argued that the market had entered the second stage after the collapse of LUNA.

Stage 3: Bottomless Exhaustion

Stage 3 – the market becomes lifeless. Anger gives way to silence, where there are no temporary price peaks, no comments, no new projects appearing.

Remember why you started

Janowitz warned of the dismal stagnation of the third stage and advised to stay firm. He reminded the current community that they are the early adopters and it will take decades before the new world is properly populated. Until then, the community must endure such crypto winters.

He said:

“If you represent a company, do your best to get through. If you are a builder, stay interested. Find other builders. Build with them. If you are an investor, develop your own thesis. Bet on people you believe in.”

He ended his thread with a list of readings that he recommends that every crypto enthusiast revisit at every opportunity.

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