There is a lot of worry in the crypto market right now. As the cryptocurrency market continues to go downwards and sideways, many investors feel disappointed, heartbroken and scared.
We have entered the long-awaited crypto bear market. Bear markets are an unpleasant time of year for investors of all stripes. Despite this, it is even more shocking that it could be the most profitable time for traders during this periods of falling prices.
But First, what is a bear market?
“A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.” – Investopedia
A quick look at the market shows we’re far, far down from ATHs. According to CMC, crypto’s market cap peaked back in early November at just under $3T. As of writing, crypto sits at roughly $1.27T. That’s a 58% fall over for 7 months.
So, here are 5 ways you can survive the bear market:
Secure the Future With Stablecoins
The first choice is to investigate stablecoins as an alternative. This is still a wise course of action despite what happened with TerraLuna (UST).
They are several stablecoins to consider as a hedge during this bear market like BUSD, USDT, USDC, etc all of which are pegged to the US Dollar. That is, 1 USD is equivalent to these stablecoins.
Now is the time to invest in stablecoins, even up to half of your total portfolio because the market is in a bear phase. We are well aware that this is not the most thrilling choice.
On the other hand, they are exactly what they claim to be, stable, which is exactly what you require in this circumstance. You do not want or need another loss of 70% to 80% of your investment.
So, the best thing for you to do now is to convert some of your assets to Stable coins.
Buying the Falling Market
That is the piece of advice that has been given the most; buy the dip! But the question is: when and where does the dip end? Isn’t that a very important thing to consider? To tell you the truth, no one possesses a crystal ball that enables them to see into the future.
Dips can be dangerous, much like catching a falling knife, thus you should do it strategically. But one more thing to take into consideration is the fact that you do not possess a bottomless dip cash. There is a possibility that there may be a dip at some point in time, but you have no more money after buying two or more previous dips.
Dollar Cost Average (also known as DCA) is an excellent choice for you to consider. Spreading out the payment of that sum over some time, such as, several weeks or months is preferable to putting all of the money at once on a single trade.
In this manner, you disperse the risk. You consistently put more money into your portfolio, regardless of the price at which the asset is currently trading.
Leverage on Futures Trading
Trading the futures market on an exchange like Binance gives traders the opportunity to trade the market in both directions; either going Long (Buying) or Short (Selling) on the market. So during this market downtrend, with proper analysis you can make profits from shorting the market.
Pay attention to opportunities to go long on the market and make profit as the market will at some point make momentary recovery.
If you trade during a bear market, this is the perfect time to improve your skill set as a trader. You can improve by learning technical analysis, risk management, trading psychology, developing a trading plan and system. You can get started here.
Trading Futures comes with a lot of risk but by managing your risk, controlling your fear and greed, you will be able to make the best decision possible. You can lose your funds here if you remove the control of fear and the greed from yourself. Very importantly, lower your risk exposure on your trades to avoid liquidation.
If you participate in trading, keep separate funds for both investing and trading. Right now, one of the best things to do is to put funds into trading. Only risk, as much as you are willing to lose.
Stop Listening to The Media
It is a well-known fact that the Media is a big influencer of people’s decisions regarding the markets.
Everyone knows the media is saying a lot of “untrue” things (I tried putting it as nicely as I could). Then, you should stop listening to them in regards to your money. The last thing you want is for uninformed people to lead your financial decisions.
Give it a moment of thought: they are the ones who endorse buying at high/historical levels and selling at low, miserable levels. This doesn’t require you to know more than elementary school maths to determine that you can’t win that way.
The real winners are the ones who are buying when everybody is selling and selling when everybody is buying, but that requires research and market analysis, to deduct.
Do Your Research
Do Your Research, sometimes written as DYOR, is a common term in financial markets. It urges potential investors to research assets before buying them. This helps them get a better understanding of the asset.
Many investors are not well-informed; they are just interested in finding a coin, which may double or triple their money. While it’s good to be on the lookout for assets, you should research before investing, especially in a bear market.
Thus, surviving a crypto bear market can be difficult from this point of view. The public opinion is against you.
Now we have concluded this article. We sincerely hope that we were able to provide you with some helpful information that will allow you to weather the downtrend in the market. We came up with our five different approaches that have the potential to make an impact. These choices will require you to invest time and, more importantly, to be kind to yourself in the process. What other approach will you consider during this period? Feel free to share with us in the comment section below.