5crash Phase
Crash & Aftermath
Liquidity evaporates rapidly. Prices collapse, often faster than they rose. Denial is followed by capitulation as losses mount. The narrative that seemed bulletproof is now questioned. This phase can take months or years to fully play out.
Warning Signals
- Sharp price declines
- Liquidity drying up
- Denial followed by capitulation
- Media turns negative
- Scapegoating and blame
- Regulatory attention increases
- Bankruptcies and failures
Common Mistakes to Avoid
- Buying the dip too early
- Averaging down into collapse
- Denying the severity
- Not cutting losses
- Becoming emotionally attached
Detection Checklist
- Sharp and rapid price declines
- Sharp and rapid price declines
- Liquidity significantly reduced
- Liquidity significantly reduced
- Widespread denial of severity
- Widespread denial of severity
- Media narrative turning negative
- Media narrative turning negative
- Blame and scapegoating beginning
- Blame and scapegoating beginning
- Regulatory investigations announced
- Regulatory investigations announced
- High-profile bankruptcies or failures
- High-profile bankruptcies or failures
- Capitulation selling events
- Capitulation selling events