How to profit in the crypto bear market?
As you may have noticed, the crypto market is not at its best and has not been for some time. You may know by now that crypto goes by cycle, between bull and bear, and currently, we are in the middle of a bear market. The bear market may seem like doomsday for many but don’t worry. For the savvy investors and traders, opportunities are plenty, even during the bear market! That’s what we will be exploring together in this article to help you through this challenging time.
What is a bear market?
Most financial market professionals consider a bear market to be a decline of more than 20% since the last high or historical high. This may be true for the classical markets, but if we had to declare a bear market every time a crypto loses more than 20%, we wouldn’t make it.
A bear market is usually a break of the current trend, i.e. bullish, with a breach below a support level or a break of a moving average. To simplify, one could say that the emergence of a long-term downtrend is usually an indicator of a bear market.
3 main characteristics of a bear market
More selling than buying sessions
It seems logical at the mechanical level with more sellers than buyers. Generally, a bear market starts with a simple downward correction with the consequence of a major technical signal to sell.
The emergence of negative emotions
A bear market fuels fear and panic. In contrast, you will have many bulls or optimists among financial market professionals who will defend that the correction, despite the confirmation of a major technical signal to sell, is temporary, excessive or over.
Technical rebounds of desperation
A bear market builds bull traps, i.e. technical rebounds that make you believe that things are moving forward for good. In reality, this is not just an illusion, because investors who were unable to sell their positions when the downward reversal signal was given, take advantage of it to do so at this time under slightly more favorable conditions.
How to profit from crypto during a bear market?
Just because a market is down doesn’t mean you can’t make money, and let’s explore some solutions together.
Automatic Trading
Trading during a bear market is not easy, especially in the crypto market where losses can sometimes reach more than 10% per day during a bear market. If you don’t have the skills or the time for it, you should seek out an automatic trading platform such as 4C-Trading or SuperBots., an algorithmic trading protocol in Decentralized Finance (DeFi) on DEXs, with full automation managed by the Vaults.
The vaults are powered by smart contracts to help you manage your assets and each vault contains an algorithm to help you trade. All you need to do is to deposit your capital in the form of crypto (BUSD for example) and the vaults will take care of the rest.
The most important question — how did SuperBots perform during the last three months when the crypto market went through a blood bath? Phenomenal! One of the bots, the “Ultimate Scalper” bot, helped the SuperBots community accumulate more than 34%!
Staking
Staking is the practice of tying up crypto-assets for a long period of time and getting rewarded at the end of it. Although it is subject to risk, it is a fairly quiet way to invest, accessible to all budgets and generally profitable.
NFT
You can also use NFTs to hedge against market fluctuations but be careful! In a bear market, all assets tend to fall as investors shy away from risk. Having said that, the bear market is also the best time to accumulate blue chip NFTs. Take for instance, BAYC’s Otherside fell below mint price in May. For the super fans who missed the mint or refused to pay the skyhigh prices, now is the best time to accumulate.
Conclusion
It is indeed possible to make money in a bear market if you know what to do! Trading is a good way to win during this crunch time. Manual trading can be exhausting because let’s face it — the bear market carries with it a big bag of emotional roller coaster ride riddled with fear and anguish. To trade without emotions and stay laser focused, automated trading with SuperBots and 4C Trading are your best bets!
