The crash you are showing is from some point in February, 2014. Up to that date, the exchange Mt. Gox was the biggest player in the bitcoin economy by a long shot, but the site was hacked and around 7% of all bitcoins were stolen. The site was unable to fulfill withdraws and users reacted by panic selling, undermining bitcoin's reputation on the way.
The main factor on the decrease in price we are seeing today is the uncertainty about the new regulations that South Korea might impose on crypto trading. While this will have a major impact on price for quite some time, it's unlikely that even the harshest measures could cause a price decrease as strong as the one from the Mt. Gox fiasco.
If you ask me about my personal recommendation, it would be something like this:
I'm not going to lie. If we see a catastrophic crash, I would certainly not be happy, but I would find that as a great investment opportunity, specially after the media goes silent on crypto. I'm a firm believer that the technology behind crypto, specially the one involved in smart contracts, will end up causing mayor shockwaves on the way global economy works.
Thank you for your comment @pk170!
Yeah I agree with you on many points here. What I illustrated here is a possible scenario. I fully agree with you that I would like to see more of the bad news for me to fully believe history's gonna repeat itself. However I must say there is still such case possible. Especially if we're gonna see another leg down making lower low then I believe it's nothing than the catastrophic crash.
So I personally will be cautious about such scenario and adapt my porfolio to it on the next rise.
PS: Love the picture, had me dying...
Of course. Talking about crypto this will always be a possible scenario. Even in the stock market which is supposed to be way more stable it would be possible to se a total collapse.
What I would also like to ask is what sets the difference bitween a colpase and a correction? While bitcoin got close to half of its peak value, let’s remember that this high price was really shortly lived, while the current price is still higher than a couple of months ago.
Crypto market is highly volatile at this point, and, while risky, that’s one of the main reasons it is so interesting.
Glad you liked the image! It’s one of my favourite memes!