Tips for Dealing with a Crypto Bear Market
The cryptocurrency market is fond of catching up with even the most experienced trader. Each new bear and bull move show signs of being similar to the previous ones, just to unexpectedly veer off and wipe out accounts of crypto traders.
Just recently, the bullish market that analysts and influencers were anticipating in late 2021 simply did not happen. The market made a complete turn against the $100,000 Bitcoin (BTC) price estimates.
Currently, Bitcoin is trading at around $38,000, almost 50% away from its $69,000 all-time-high. Moreover, most altcoins have gone down by more than 60% in the last 60 days. With all the changes, traders must consider re-evaluating their portfolios and make the best decision to safeguard their wealth.
Do you hold, buy more, or simply flee in panic? Here are some strategies on how you can survive the crypto bear market and retain as much value in your portfolio as you can.
Disclaimer: The content of this article is not an investment advice and does not constitute any offer or solicitation to subscribe or redeem.
Our content is intended to be used and must be used for information and education purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances.
Don’t Short the Market
As an investor, do not fall for the pressure to short Ethereum, bitcoin, or any crypto. Don’t be tempted to think that the price will continue to decrease.
Experts warn that going short is extremely dangerous and may cause you more losses than good.
The time to short is most likely over; avoid making an emotional decision with the prospect that the cryptocurrency market is going to ‘zero’; it might never happen. On the contrary, all indications show that the upside of buying is inevitable; chances of success with shorting are overly limited.
Wear your Long-Term Lenses
While many view cryptocurrencies as a digital goldmine, they experience dips and rallies common to most assets. As such, viewing your crypto portfolio as a long-term holding may be helpful.
“The biggest successes in the crypto space were built when the markets were down, and I’ve never believed more in the long-term thesis being correct,” John Wu, president of Ava Labs.
Do you remember the plunging and the subsequent dramatic rise of bitcoin in December 2017? Bitcoin crashed from $20,000 to about $3,200 within a few days but rebounded stronger and better shortly after.
Going by that past, the current price of bitcoin and other crypto is not permanent. The 50% plus drawdown may appear significant, but most seasoned crypto traders will tell you that the market will recover, and new highs will be recorded.
People seem to forget too fast. In May last year, bitcoin dropped from $60,000 to $30,000 in just 10 days. Rationally, there will be a correction and new high sometime soon.
It is common for investors to feel insecure when they see the constant decline in the value of their crypto. You may use staking to cushion your portfolio while earning some passive income.
With staking, you lock your cryptocurrencies on a blockchain for a specified amount of time from where you will earn some income.
Cryptocurrency will prevail
With the bear market upon us or the possibility of a bull market coming up soon, the crypto coins will most likely survive. Investors should leverage the opportunities that crypto brings in this bear market.
Whether you choose to hold your coins or buy during the dips, you should remember the ultimate rule: do your research first. And then work with a safe and reliable crypto platform like for all your undertakings, to maximize your potential for success.
For more information on all-things crypto, keep up with the IXFI Medium blog.