Within just a few days the crypto market has experienced a lot of drama over the last week. Bitcoin fell almost 60 % down from its all-time high. Other assets like altcoins or tokens had an unprecedented downfall. In some cases, they lost almost 90 % of their worth.
The most severe impact has been seen in the DeFi ecosystem. Most DEX and governance tokens lost heavily during the sell off. Let’s take a look what happened now that the dust has settled.
The market took a hit
Many traders and even experts where took completely by surprise when the market took a sharp move down south on May 19th. Most assets lost half of their value that very same day. The reason why this is not taken as a sign for an even heavier loss lies within the past of the crypto market and particular BTC.
During the bull run in the year 2017 there were several occasions when BTC simply lost between 30 % and 40 % value in a relative short amount of time. Many analysts believed that history was just repeating when they saw huge losses throughout the whole market.
But this time it was indeed different. Between May 19 th and May 20th, the market seemed to have recovered and throughout the industry many believed that this was just a dip. But on May 21th the whole market came crashing down.
How to deal with this situation?
There are three types of groups who are representing different strategies to deal with this situation. Most of them have been discussed by crypto magazines, influencers, analysts and on social media.
A lot of people believe that this is just history repeating itself and that the market is going through cycles. They remain bullish even through sharp drops in price, because the think that the market will recover later this year.
Another point of view is being bearish all along. This group of people believes that everything is over, because this type of crash has been unprecedented in its extent and severeness. They believe that the cycle is over and that the market will enter a phase were it rather goes down or sideways until the next bull cycle is happening.
The third group of people remains flat. They either sold or hold their crypto still waiting for a strong signal to decide whether to re-buy or finally sell.