There are 3 phases of a bear market and we just entered 2

Original author: Jason Yanowitz (BlockWorks Group co-founder)

Original compilation: czgsws & wzp, BlockBeats

This article is based on the opinions expressed by Jason Yanowitz, the co-founder of BlockWorks Group, on his personal social media platform. There are 3 stages. We have just entered Phase 2

Phase 1: Relax 

 Bull Market The excitement and greed that came with it is still there. There will be mini-narratives that last for weeks. Assets are still supported by floor prices. Valuations are lowered, but companies don't make tough decisions (e.g. phasing out products, laying off employees). Things seem to be fine.

Phase 1 doesn't "feel" like a bear market. There will be a sense that prices have fallen back to "realistic" valuations. Investors continue to allocate funds to portfolios, project parties continue to build... In general, life is good. Only some people are selling.

Phase Two: Forced Capitulation 

Here is where the market goes bad stage.

Narrative dies. The price fell 90%...and then another 90%. Ushered in full layoffs. Mainstream media and cynics are firing on all cylinders in Phase 2. They'll tell you "I told you so!"

Luna sends us to Phase 2.

Diamonds had to start selling at stage 2. They sell not because they want to, but because they have to. Celsius doesn't want to sell, they may have to. There will be more funds, companies and individuals like Celsius.

In stage 2, a market rally will immediately trigger a sell-off. That is "dead cat jump". Companies that need token prices to stay high will be crushed. Founders who buy their own tokens to sustain the project are equally crushed.

The lower the price, the greater the power of the bears. The greater the bearish power, the lower the price. This creates a vicious cycle. In the second stage, prices tend to experience sharp crashes. Excitement was replaced by anger.

The third stage: Bottomless & exhausted

After experiencing extreme pain Extreme exhaustion. There is no rebound. There is no narrative. Prices are going sideways or slowly falling, which is boring. At the bottom, anger is replaced by silence.

In stage 3, you will want to get out. Regulators will attack when the market sentiment is low, and the KOLs and big Vs that investors like will be quiet.

Web2 investors will quietly stop investing. Talented builders will leave. The company will shut down. You will question your every assumption.

The third stage is the hardest to survive. If you are a company, please do whatever it takes to get through this. If you're a builder, stay interested, find other builders, and build with them.

If you are an investor, please formulate your own investment logic and listen to the opinions of those you trust most.

Don't lose sight of the big picture. We are building an open, free world. It will take decades, not years. Turn off your computer, reduce your focus, and go for a walk. do not give up.

Many talented people left. But those who stayed were rewarded. We're going to have to put our heads down, build value, and survive for quite some time to survive the bear market. Things will get worse before they get better.

In a bear market, the pattern needs to be opened, don't forget why you joined.

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