This is what the majority of the crypto veterans will tell you in regards to the recent crypto bear market. Naturally, these people have seen it all a few times over. However, to navigate safely through these waters, it is important to have a strategy.
Today we are going to be looking at the most important tactics that you can integrate into your behavior as a crypto user during a bear market. We hope that these tricks will serve you well and ultimately guide you toward the next crypto bull run.
1 Remember that Bitcoin & Crypto cycles are nothing new
No doubt, you may have heard stories of people buying Bitcoin when it was worth only a few cents and holding on to it. Similarly, you may have heard the tales of those that sold all of the Bitcoin the moment that it reached $1. These may all be true. However, they are extreme examples of investor behavior.
Back in October 2013, for example, the price of BTC was around $150. One month later, it had risen to $1150 before falling back to $550 by the end of the year. This may have seemed shocking at the time. But, it would not be the last time that this happened.
The Bitcoin halving events, which occurred every four years, have naturally affected the Bitcoin price. Statistically, the halving tends to occur during the middle of one such cycle. Furthermore, every new cycle introduced a new, higher price for BTC.
The point is that Bitcoin overcame those struggles. As of July 2022, Bitcoin is trading at over $20K. And many are optimistic that much better days are ahead. The same can be said about other serious crypto projects. Yes, the price of their native coins is dependent in many ways on that of Bitcoin. However, in recent years numerous companies have invested heavily in blockchain technology with medium and long-term goals in mind.
2 Be honest with yourself about the risks of crypto investments
All investors are governed by a desire to plan for the future. Naturally, we all desire to move with the times and take advantage of trends. However, it is also in human nature to be greedy. This can be a pitfall for investors regardless of the industry in which they are interested.
Let’s quickly address the elephant in the room! The Terra Luna crash surprised most cryptocurrency market analysts. More importantly, the events lost a lot of people plenty of money. It is important to remember these things.
However, we must also remember a few things that should make us optimistic about the future. First of all, the crypto space, generally, is in better shape than it has ever been. There are more serious projects than before. And further regulation is being introduced. This will, hopefully, help protect users from such things happening.
Lastly, the volatility of the crypto market is usually the reason why some people earn fortunes from crypto. But, the reverse is possible as well. As long as these things stay the same, crypto investors need to go back to an old piece of wisdom: Never invest more than you can afford to lose!
3 Diversify your portfolio regardless of the crypto down cycle
Are you developing your investment strategy based exclusively on the fate of crypto? Or, worse, are you basing all of your strategies on the evolution of one cryptocurrency? If that is the case, you are certainly taking more risks than you should.
All experts agree that investors should not adopt an all-in mentality. Furthermore, while it may be tempting, it is never wise to make large purchases of crypto in one single go. Yes, the desire to maximize your markup is large. But remember that this is a marathon, not a sprint. It’s all about smart money.
Not only that, but financial experts tend to agree that diversifying your investment portfolio is vital. Ideally, this should include stocks and bonds. And, of course, all of this should be balanced by your streams of income, of which you should only ever use a fraction for investments.
The idea of getting rich quickly from crypto is appealing, no doubt. But, the opposite may be just as true. To avoid this, take a measured approach to investment, continue to diversify, and maintain your willingness to learn. This brings us to our next point. In this way, you will be able to take the best investment advice.
4 Keep learning and prepare for the bull run
Buy low, sell high. That is the objective of all short and mid-term investors. But, the task itself is easier said than done. Most of us get sidetracked or confused by all of the available information when it comes to making the right investment decision. Also, while it is natural to have strong feelings about current events, we should not allow these to cloud our judgment.
Remember what we said about the Bitcoin market year cycles? Well, so far, during the brief existence of blockchain technology, these have stayed true to the mark. This is, however, not something that has surprised many crypto analysts. In fact, many of them consider this an accumulation phase.
Nowadays, there are numerous resources that can help with your crypto education. Yes, the internet includes a lot of less than useful information as well. But, once you start to do your own research, you will be able to spot the good ones from the bad.
Put your knowledge to good use! Nobody can guarantee that a bull run is coming. Anyone saying otherwise is a liar. However, historical data seems to suggest that this is likely to occur.
Many investors have built their treasure chests from purchasing crypto, BTC especially, when the prices were down and selling once the market cycle was over and valuations recovered. While this may seem incredibly simple, it is a rule that has failed so far!
5 Avoid FOMO, ignore FUD
The rise of Bitcoin and blockchain technology has shown the power of community with an economic system. Above all, it’s proven that value is attributed to whatever item that a large number of people choose to endorse.
But, the opposite is true as well.
FUD (Fear, Uncertainty, Doubt) can spread to any community and potentially ruin a crypto project. With so many voices on the internet vying for your attention, you will need to learn which ones to consider and which to ignore. Social media can be a great tool but also dangerous at times.
FOMO (Fear Of Missing Out) is another phenomenon that influences the market. It is just one of the elements that are at play when it comes to large crypto fluctuations. However, it is rarely based on sensible facts.
Your job as an investor will be to consider all the information that is available to you and make responsible decisions. Don’t let yourself be driven by fear or by greed! Smart investments always win out.
The bear market is an opportunity. Get ready!
The most knowledgeable investors will tell you that there are no bad days for the market. While some may detect a hint of arrogance about the statement, in many ways, this is true. There are many strategies for making money with crypto, and they all work regardless of the state of the market.
For most experienced crypto investors, the bear market is a time of cleansing and one in which additional information must be gathered. But, it is not a time for pessimism. Yes, the crypto market offers investment opportunities at each step for those that are truly looking for them.
Stay balanced, passionate, and willing to learn, and you will make it out of the bear market unmauled. Who knows? Once the bull run begins, you may even be better equipped to deal with new profits.