Crypto investors and traders got on the right foot and even went the extra mile to make this year about crypto, NFTs and the metaverse. Yet, here we are, thrown into what appears to be a crypto winter, and caught in a vortex of the crypto bear market.
Considering the recent events, you must have been speculating in your crypto assets every now and then, while you watched helplessly as your portfolio was painted red.
Well, don’t surrender yourself to the crypto bear market, this will only extend the losses and associated risk factors. It’s time to re-analyze your investment tactics and brush up on your fundamental concepts to stay safe during bear markets.
We have collected some tips that can be your resourceful ally when the crypto market is so tight. Let us begin!
- Secure your portfolio and HODL
Having a clear idea about your crypto investments and making sound decisions during a bear run is what will take you far.
Given the volatility of the crypto space, you must first secure the cryptocurrency that is in your wallet. HODL means securely holding Bitcoin, Ethereum or other prominent cryptocurrencies rather than selling them below cryptocurrency bear market.
At the same time, you should also ensure that the crypto you hold is not obtained from “pump and dump” schemes. Although it is difficult to predict which cryptocurrency will bounce back or which will go down the drain, keep an eye on trends and news. But, do your own research and take your time to come to a conclusion instead of panic selling.
- Develop skills
Regardless of fluctuations in the crypto bear market, you should continue to learn new strategies to survive the “bear”. To tell you the truth, a bear market is the best time to increase your crypto knowledge without buying pressure.
Usually, everyone is in a fierce competition to keep the upper hand with an intention to earn maximum. Therefore, you should gain valuable new insights by getting your head around the crypto and blockchain concepts.
Learn to read smart contract data, analyze trading patterns, and above all, get strong crypto for your portfolio for a small amount. This brings us to our next point, consider improving investment formulas and learn from your mistakes during the crypto bear market.
- Don’t go against the crypto market
It is better to improve the investment formula and learn from not only your mistakes, but also those of others. A crypto crash often tempts people to try trading the market via margin trading or shorting. But if you still can’t calm your appetite for trading, you can use these tried and tested trades techniques during a crypto crash.
When all is said and done, change your mindset to not taking losses. Take losses and wait for a temporary pump to buy more when the previous low is settled.
Especially when we are dealing with the crypto bear market, you should focus on survival first. Trying to recoup your money through margin trading is stupid. Don’t try to treat this market by making crazy plays. The least you can do is: stay in the market, generate a new stream of income for the bullish season, and hope for the best.
- Dollar-Cost Averaging (DCA) will come to the rescue
Investing in a project based on what the so-called crypto community hyped up is a bad idea at any time, not just while suffering in the crypto bear market. In case you have already decided to get involved in a given crypto project, using DCA is the best way to minimize the risks involved.
By adopting a proactive approach when implementing your master plan, you ensure that control remains in your hands. To do so, choosing DCA allows you to safely spread your budget over an annual cycle and beat FOMO while waiting for other opportunities across the crypto bear market.
- Don’t wait for ATH (All Time High)
Diversifying your portfolio to avoid post-cryptocrash effects is a good move, but sometimes buying crypto at low prices doesn’t mean making a profit.
Developers often abandon projects during the crypto bear market, and abandoned assets are not sufficiently updated in real time, making the cryptocurrency unstable and vulnerable. It is fair to say that any crypto will never actually reach an all-time high (ATH).
Remember that not all low prices are bargains, and some cryptocurrencies are sold at low costs for a purpose! Anyone who tells you otherwise is probably trying to trick you into committing a crypto fake.
- A big no to overestimating the crypto market
Do not assume that every cryptocurrency you have invested in or plan to invest in will return. Some cryptos die permanently. There can be many factors contributing to such losses, including running out of funds, pump and dump scams, or even disappearing developers or teams.
The crypto bear market induces fear and anxiety in investors and traders, regardless of whether you are an amateur or an expert crypto player. So focus on investing in something of real value that has some authenticity and reputation in the crypto market.
Also, in the panic and stress of losing all your money, don’t rush into an impulse decision. You never know you might get a pleasant surprise in a couple of years. Trust your gut, don’t overestimate, and wait patiently.
- Comparing with the past is a total waste
The crypto space is expanding rapidly, but when you compare it to the past, you will mostly come across scams and white papers. Back then, most people in the crypto industry were amateurs, and the volume was much lower than in 2022.
The protocols are more mature now. We undoubtedly have protocols with huge cash flows backed by venture capitalists and broad user bases. So all those who say that everything goes to zero are wrong.
The crypto bear market is just a passing phase, but also a time to reflect and write your own rules and principles to plan for the crypto spring. On the other hand, fear of crypto winter is completely useless, given that the crypto market tends to show dramatic fluctuations.
- Build additional income stream
If you are a newbie experiencing your first crypto bear market cycle, then it is all the more difficult for you to stay calm during such a difficult period financially. Well, you are not alone in this.
No one directly tells you to have passive income while working with crypto. No matter how much a crypto enthusiast denies it, having an extra income stream isn’t a bad idea.
The goal is not only to have some cash on hand, but also to stay strong even during crypto crashes and even worse, crypto winters. When regular income suffers consistently over a long period of time, it can put the person in dire straits leading to poor financial decisions.
It is better to analyze where you stand, how much money you can afford to lose, and prepare for the better days that definitely lie ahead.
- Stick to your strategy
In the midst of the crypto bear market, lack of proper risk management can turn any winning trade into a losing trade very quickly. This is why having a proper trading strategy can help you avoid making emotional decisions. It is therefore suggested that you stick to your own well-researched strategy.
You can also reduce risk and keep your emotions in check by simply pre-determining take-profit (TP) and stop-loss (SL) orders. Consequently, it would be easier for you to reduce the stress of the entire crypto bear market and prevent you from making emotional decisions.
- Invest in yourself
Crypto players know how much they sacrifice to make it in the game of trading and investing. During this crypto bear market, you should probably build and invest in your non-crypto friendships to stay connected to your roots.
Invest in your physical and mental health, take it as the recovery phase to help push the odds in times to come. Some things are also more important than money such as family, friends, health and relationships. Release the crypto bear from your mind and use this time to strengthen your personal growth areas.