What is the crypto bear market?

One of the most significant and well-known principles of investing is “buy low and sell high”. In a nutshell, this is how investors make money. Therefore, it can be critical for crypto investors to know when a bear market is coming or when it is about to end.

Since the introduction of Bitcoin in 2009, cryptocurrency prices have plummeted several times, and such drops in prices have led to the disappearance of some altcoins. Due to the fact that these crashes have occurred in lesser-known forms of cryptography or without widespread media coverage, not all investors are informed about them.

Therefore, every investor needs to understand the trends in the financial markets that contribute to various changes. Understanding the difference between trends is essential for making better-founded investment decisions because different market trends lead to completely different market conditions. Without understanding which trend prevails in the market, it is impossible to adapt to its changing conditions.

The market trend is the general direction of the market movement. In a bear market, prices tend to decline, which makes it difficult to trade or make a cryptocurrency investment, especially for newbies.

What is a bear market?

A bear market is a period of time when there is a sharp decline in the prices of cryptocurrencies in the financial market. When the price starts to drop, a lot of traders rush to leave the markets. They usually stay in cash or lock profits from their long positions.

Although investors can make a profit from a decline in prices, bear markets carry enormous risks for inexperienced traders and make it challenging to trade in the market. They can easily result in significant losses and permanently scare away investors from the financial markets.

The opposite concept is a bull market. The bull market means a rise in prices in the stock market or in any financial market, including Forex, bonds, commodities, real estate, and cryptocurrencies.

The difference between a bear market and a bull market

How to trade the bear market

Staying in cash or stablecoins is considered one of the simplest strategies for the bear market. If you are dissatisfied with the decline in price, you should be waiting while the falling of prices stops. If there is a new bull market in the future, you will be able to get a profit from it.

It is worth noting that when you decide to trade or invest in cryptocurrency, it is better to trade according to the market trends. Thus, one more strategy that can bring a profit in bear markets is to go short. In this way, traders can get a profit while asset prices are declining. We can highlight the following strategies of trading such as:

• swing trades,
• day trades,
• position trades.

The main aim of these strategies is to trade in the direction of the trend.

At the same time, many traders are looking for trades going against the direction of the main trend, which is called “counter-trend” trades. Let’s consider how it can bring profit.

If the bear market comes, some of the traders enter a long position on a bounce. Sometimes, this movement is called a “bear market rally” or a “dead cat bounce”. The movement of a counter-trend price can be volatile, as some traders use the opportunity to continue the short-term bounce. However, till the bear market is not completely over, it is supposed that the downtrend will restart immediately after the bounce.

Therefore, successful traders take profits (at the level of recent highs) and exit the trade before the bearish trend resumes. On the other hand, during a bear market, they may be locked in a long position. That is, we are talking about a very risky strategy. Even the most experienced and advanced traders can suffer significant losses by catching a falling knife.

The concept “Catching a Falling Knife” (“Falling knife” or “Catching the Bottoms”) means the action of purchasing an asset that is rapidly falling in price.

Cryptorobotics platform: The best way to trade during a Bear market and Bull market

As we mentioned above, the bear market is very risky, and all investors need to know the trends of the cryptocurrency market. Newbies in this area can experience particular difficulties during a bear market. Even the most experienced traders can suffer losses. Therefore, the Cryptorobotics team has developed various solutions for traders to reduce risks and increase a trader’s profit. On this platform, you can start a manual trading process or use algorithmic trading.

If you want to start algorithmic trading, you should sign up for this platform and select “Algotrading”. After that, you will be able to choose the most suitable option for your cryptocurrency trading.

Algorithmic tools:

Trading robots

There are three types of crypto trading bots that allow people to trade 24/7. Only what you should do is to customize them.

Crypto Futures

There are three types of such bot that trades on both negative and positive market trends. These bots differ its level of risk and the number of trading pairs.

Copytrading on Binance and Binance Futures

Copy trading is automated trading in which a trader copies the trades of another one and tracks the effectiveness of the trades of this investor.

To start copying trades of an experienced trader, you have to:

• Subscribe to a channel.
• Your balance must be in the same cryptocurrency that the experienced trader is trading.
• The amount of your balance should be equal to or higher than the minimum balance specified in the channel.
• Launch the Copytrading.

Autofollowing

Autofollowing is a fully automatic feature that greatly simplifies the cryptocurrency trading process. The essence of this function is that the analyst provides signals, and the robot follows them and automatically trades.

Also, you have the opportunity to subscribe to a new Autofollowing channel using Artificial Intelligence algorithms to predict the price for every following hour. The system decides to give a signal now or wait for a more suitable trend in the cryptocurrency market.

If you want to go to this channel, it is necessary to follow this instruction:

• Select Algotrading.
• Click on the Autofollowing.
• Choose AI Columbus Futures Channel.

Signal trading

Signals trading is a function that makes the trading process significantly easy and helps protect traders from the risk of losing their funds and increasing the chances of receiving returns.

By the way, you can customize the additional features like:

• OCOs (Stop-loss, Take profit, Trailing stop)
• Limit and Stop-limit orders
• Alerts

The customization of such features will help you improve your trading process, avoid any risks of losing your money, and make a profit from tradings during the bear market and bull market.