The crypto markets have been having an interesting week to put it mildly. Seas of red and deep cuts have had the vultures circling, the weak hands folding, and the naysayers expending their lifetime's allocation of "I told you so's". While the last two weeks have been painful for anyone who bought bitcoin in December or ripple in January, they've been welcomed by many as "a necessary correction" and an opportunity to pick up cheap coins.

Flash Sale for a Limited Time Only

Ripple.

At times of sudden upward or downward movements, market psychology is fascinating to watch. The giddy highs of December, when crypto traders found themselves stupidly rich and refreshing their portfolio apps in disbelief, feel like a lifetime ago. Only three weeks ago CNBC were shilling $3 ripple and a token designed for the global dental industry had a billion dollar market cap. Something had to give, and when it did, it was inevitable which coins would bear the brunt of the collapse.

It's bitcoin which has attracted the apocalyptic headlines though. As the market leader and the "face" of cryptocurrency, it earns the praise in good times and bears the scorn in bad times. And right now, for many crypto investors, it is the worst of times. For those with short memories and shallow pockets, the past week has taken its toll, both financially and emotionally. But for crypto believers who got in before 2017's peak mania, the current cycle is nothing to be alarmed at.

For one thing, they got into crypto before it was all about money, and thus don't measure its success by its dollar value. And for another, they've seen it all before and know not to confuse current pain with terminal illness. The crypto markets will bounce back, and when they do, the recovery will likely be strong and sudden. Quite when that feat occurs though is anyone's guess. When mass panic sets in, TA and FA go out the window and emotions reign supreme.

Iron Hands Show Their Might

Just as times of oppression spawn the best protest music, art, and culture, bear markets spawn the best memes. Morbid humor has been in plentiful supply on crypto trading forums of late complete with the obligatory "pink wojak" reaction images and talk of seeking new employment. While jokes about burger flipping remain little more than that at this stage, the Lambo dreams have been put on hold for now. "I unironically sent an email to my ex manager this morning," confessed one forum user. "I feel like a total idiot and she didn't respond yet". Crypto Feels, which displays a scrolling page of red markets against a sombre orchestral soundtrack, is beautiful in its bleakness at times like these.

It's hard to find a capable performer in the cryptocurrency market right now. Even ETH, which had weathered the worst of the storm this week, has succumbed to the red tidal wave, dropping 30% in the past 24 hours. The less said about ripple (-40%), the better. Sites such as Coincodex chart the market movements in real time and for anyone who's all in altcoins, it's not a pretty sight. For those watching from the sidelines – either because they've yet to buy in or because they've long since switched to tethers – the slump is an extremely comfortable one to observe.

Speaking of tethers, they're by no means the only cause of the market capitulation and may not even be a major cause (the truth is no one knows). It would be fair to say that the lingering uncertainty surrounding the solvency of Tether and the U.S. subpoena of its records aren't helping. While some people have praised pseudonymous critic Bitfinexed, who first shone a spotlight on the company, others are deeply critical.

Tethering for Dear Life

The Cryptocurrency Markets Are Having an Interesting WeekIt has been speculated that Bitfinex and Tether may be solvent but may also be engaged in dubious financial practises due to banking issues or other reasons. The companies aren't headquartered in the U.S., so can't be shut down by U.S. regulators, but exchanges such as Kraken and Bittrex, which are reliant on tethers, are within their reach. It has also been speculated that events as diverse as a regulatory "raid" on Coincheck's Japanese HQ and the Chinese New Year are to blame for the tumbling markets.

For all the hysteria, schadenfreude, and obligatory FUD, it is worth noting that the cryptocurrency markets, currently valued at around $350 billion, were worth just $200 billion as recently as November. What goes up must come down, and when the capitulation gives way to consolidation, iron hands will begin to rebuild and reaccumulate.