"The lower prices go, the louder the bears get. The louder the bears, the lower the price goes. This creates a vicious cycle. In Stage 2, prices crash violently," Jason Yanowitz says.
We've just entered the second stage of the bear market — and things are about to get worse, according to Jason Yanowitz.
He argues LUNA's collapse now means we're firmly in stage two — "forced capitulation" — where the crypto markets keep falling and painful layoffs begin across the industry.
"This is where it gets ugly... Mainstream media and cynics rise up in Stage 2. They laugh and shout 'I told you!'"
Yanowitz explained that investors who once had diamond hands are now selling out of necessity — and warned "there will be more funds, companies and individuals like Celsius."
He predicts that excitement will now turn to anger — and already on Crypto Twitter, we're starting to see people play the blame game.
"The lower prices go, the louder the bears get. The louder the bears, the lower the price goes. This creates a vicious cycle. In Stage 2, prices crash violently."
But what happens after — as Yanowitz puts is — prices fall by 90%... and then by another 90% after that?
"After max pain comes max exhaustion. There are no bounces. There are no narratives. Prices consolidate sideways or slowly move down. It's boring. At the bottoms, anger is replaced by silence."
Challenging Times Ahead
There's no sign of when the third and final stage, Bottomless Exhaustion, will begin — but Yanowitz paints a picture where crypto traders no longer want to be involved in the space.
Not only will regulators begin to scrutinize digital assets more, but talented developers will look for opportunities elsewhere… with some companies shutting up shop.
Yanowitz claims that this stage is the toughest to survive, and his message is simple: Don't give up.
"Don't lose sight of the big picture. We're building an open, permissionless world. It will take decades, not years. Close the computer, zoom out, go for a walk."