The darkest moment of a cryptocurrency trader after an 80% loss

Author: Alexander Choi

Compiled by: Deep Tide TechFlow

“I sacrificed everything for this… just for this…?”

In just the past week, your portfolio has plummeted 80% from its all-time high (ATH).

You start to reflect on what you could have done differently. How you should have better assessed the risks, and how you should have respected cryptocurrencies as a high-volatility risk asset. Of course, there are also those sleepless nights spent trading—time that could have been used to spend with friends, family, or learn other skills.

For me, this moment happened in the summer of 2024, during the period of a market crash caused by post-war fear, uncertainty, and doubt (FUD).

Before this, I had been in a break-even or even a loss position for six consecutive months. Sometimes I struggled in the market for up to 18 hours a day, while also balancing my studies (at that time I was still in school).

Then, in May 2024, I turned my last $500 into $104,000 in less than two weeks. But in the following month, I lost that money back down to $18,000.

This experience plunged me into one of the worst periods of my life. I temporarily left the crypto market, started going out for drinks every other day, staying up late watching “Game of Thrones,” and playing “League of Legends.”

Image: Once surged to Emerald 1

Even after experiencing this significant pullback, I am still sitting more steadily now. However, those who have gone through or are currently experiencing similar situations know that the real damage caused by the “explosion” of a portfolio is not just the monetary loss, but also the blow to one’s confidence as a trader.

You will start to question yourself:

“Am I just lucky…?”

Image: “Is all of this just luck?”

And the worst-case scenario is that you fall into a vicious cycle of self-doubt, constantly trying to turn things around with the next trade.

What should I do?

Please remember that every great trader has experienced a drawdown of 80% in their portfolio multiple times.

What truly makes them great is how they rise from it. And to help you through this, I want you to remember one thing:

“If I have done it before, then I can do it again.”

Every morning when you wake up, repeat this phrase to yourself. Reflect on the past and find the strength that inspires you.

I saw someone suggest to “disconnect” from the historical all-time high (ATH) of the portfolio, saying that it was never the real you, and so on. But I disagree.

No matter what you did to bring your portfolio to ATH, those abilities are still a part of you. You won't magically lose those skills. Instead, you might just have overlooked certain factors or violated your own trading rules in some areas. So, what we need to do is quite simple: categorize the issues.

What am I good at? (How do I reach an ATH in my portfolio?)

Where did I mess up?

Take some time to write down these two things.

Image: Simple questions, complex answers

For example, when I turned $500 into $104,000, I completely achieved this by massively buying high-demand new trading pairs on-chain. I excel at narrative analysis, assessing the ceiling of new narratives, conducting research, and trading highly elastic assets (Beta). During that period, on-chain trading was exceptionally hot, which perfectly matched my skills.

But where I messed up was that when the market turned and trading volume dried up, I continued to trade with the same high-risk style. After experiencing continuous losses, I tried to make up for the losses by increasing my position size, but ended up suffering a double blow instead.

You need to view cryptocurrency trading as an ongoing process. Profits and losses do not exist in isolation.

After experiencing a severe pullback, the only way to truly rebuild your confidence is to re-understand the essence of yourself as a trader.

Image: Understanding yourself is more important than understanding the “straw buyer”.

If you haven't developed the habit of recording your trades yet, it's time to start. This is where a trading journal comes into play. From now on, record every trade you make and write down your thoughts about the market each day. Don't worry about the format; whether it's through documents, notes, or pen and paper, as long as it's a method you feel comfortable with, it's fine, but you must actually put pen to paper.

Ask yourself:

What is the narrative behind the cryptocurrency I am trading?

Why did I buy in at that position?

Why have I held it for so long?

Why did I sell at that position?

Wait, wait…

Image: Where did I go wrong?

Keeping track of these things will help you manage your mistakes while also reinforcing the areas where you already excel. When you see in your own handwriting the habits that lead to your best performance, it will give you a clearer understanding of your strengths.

Why are you here?

From now on, with every transaction, especially when you return to the starting point of your peak, ask yourself one question: “Why am I doing this?”

Image: What is your goal?

After experiencing the first 80% drawdown, during those sleepless nights, I often sat there thinking: if I continue like this, will my life be forever stuck in this state? Staying up late playing games, drinking meaninglessly, and gaining nothing but ranks in League of Legends.

It wasn't until I started to find my own “why” that I got back on the path of continuous trading.

Why do I desperately need to succeed? Because my parents have poured countless efforts, sweat, and money into me, and I don’t want them to end up seeing just a “NEET” who only cares about games and pretty girls.

Why do I need success so desperately? Because I want to give back to the family and friends who have helped me along the way.

Why do I urgently need to succeed? Because I don't want to spend years learning, only to end up as a “work machine” working for others my whole life.

Every transaction, I act with these “whys” in mind. If your only motivation is to “make money” without a deeper meaning, then the illusory numbers on the screen cannot support you through those dark moments.

So, now, try to imagine this - what if you were already dead?

Unprepared, leaving nothing behind, dying just like that. What is your first reaction?

Do you feel that you haven't left anything for your parents to be proud of?

Do you feel that you lack the ability to support your family?

Isn't it a pity that I couldn't create more life experiences for myself?

You probably wouldn't think of a certain virtual number in your account. And that is your “why”. This is the meaning of your life right now.

Beyond any risk management advice, this is the core question: “If I make this trade, will it help me further achieve my life goals?”

Having a clear goal will give you all the motivation to maintain discipline on those quiet market days.

Believe in yourself

Especially when you are still young, you may have more time than you think. So, apply this long-term perspective to your trading.

Do you think this cycle is over?

So take advantage of the bear market when others have given up, hone your skills, prepare for the next cycle, and even achieve financial freedom in the next bull market.

I know this journey is tough. I know you feel like the whole world is against you, and that even those in your social circle don't understand your struggles. But as long as you learn something from this failure and maintain discipline when others choose to give up, you will ultimately succeed.

You may have lost your “coins”, but you still have your “experience points” (XP).