Crypto bear market: make the most of current opportunities

While the casual awareness of cryptocurrencies has reached an all-time high, their valuations have dipped by 35–50%. Crypto market entered its bear phase, witnessing the real panic of investors and the crush of altcoins.

Do we need to be afraid of a new crypto winter or is it just a challenging time? We can’t predict the future, but we believe two main factors will fuel crypto’s growth: how long speculative interest persists and whether users adopt blockchain technology in masses.

What is a bull or bear market?

First, let’s remember the terminology. According to Coinsbase, markets experiencing sustained and/or substantial growth are called bull markets. Markets with the opposite experience — sustained and/or substantial declines — are called bear markets. Each presents its own set of opportunities and pitfalls.

Speaking about the bear market, it may also bring benefits. In case of long-term investment strategy, buying during a bear market can pay off when the cycle reverses itself. Investors with shorter-term strategies can also be on the lookout for temporary price spikes or corrections. And for more advanced investors, there are strategies like short selling, which is a way of betting that an asset will decline in price.

This has happened before… or not?

Yes, you can remember the crypto winter of 2018. The market is evolving on the circle trajectory, that is why the downs should be followed by ups. Crypto markets are volatile, so buying cryptocurrencies at any price — let alone a dip that might become a long-term trend — is risky. While prices could return to previous levels, they could also fall even further, leaving your investment underwater.

Let’s have a look at the Bitcoin’s price outlook: upon its highs and lows, there is a widespread opinion of the cryptomarket as a potential bubble. Cryptocurrencies have few metrics available that allow for forecasting, if only because it is rumored that only few cryptocurrency holders own a large portion of available supply. These large holders — referred to as “whales” — are said to make up two percent of anonymous ownership accounts, whilst owning roughly 92 percent of BTC.

Forbes Advisors’ comments are: “Bitcoin prices in particular have shown a degree of seasonality to date, appearing to fall in value to lesser or greater extents in the spring before bouncing back in early summer.“ The curious fact is that the mining industry is growing bigger than ever. Bitcoin mining difficulty set a new record high for the sixth time this year on May 10, reaching 31.25 trillion, according to mining data from Braiins.

Besides, market experts say that the latest fall in the crypto market is not any industry-specific phenomenon. Financial markets across the board have taken a hit, jittering the sentiments in the digital token space.

4 ways to stay sane while crypto bear market

In its turn, Coindesk recommends 4 things to do in a crypto bear market — they sound reasonable, that’s why we decided to share them with you:

​​1. Buy the crypto dip using dollar-cost averaging. You’d invest a set amount of money (say $50) every week or month, whether the asset is rising or falling. This distributes your risk and allows you to invest through bull and bear markets alike.

2. Use indicators to find the best entry point. A popular method is to use the Relative Strength Index (RSI) indicator — a momentum oscillator characterized by a channel and a line that oscillates in and out of it.

3. Diversify your investments across different crypto assets. DYOR (Do Your Own Research) on each asset you are planning to invest in.

4. Manage your emotions. You’d have a concrete plan in mind, as fear and greed are powerful motivators and can often lead to making snap judgments that end in losing trades.

Adoption of blockchain technology is growing, and the investors’ loyalty is the key driver of crypto projects. Bear these points in mind and keep your brains cold!

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