buy_crypto_navigate a bear market

How To Navigate Your Way in a Bear Market

The Fear & Greed Index is used by investors to understand market sentiments. In essence, fear leads to assets being sold at a lesser price than their intrinsic value. Conversely, greed leads to assets being sold at higher prices than their intrinsic value.

Since cycles are imminent in any market, bear and bull markets are observed throughout the price trajectory of any assert.

The bull market leads to rise in prices. Whereas, the bear market means you will see your portfolio dipping. 

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The red charts may make you panic and try to sell off your assets to mitigate your losses. But even though bear markets can be scary, they do not necessarily mean a loss.

Here are a few tips to help you navigate the bear market:

  1. Stop checking your portfolio
  2. Checking how your portfolio is performing seems logical for any type of investment. This is even more important in an asset as volatile as crypto. However, obsessively checking your portfolio during a bear market will do you no good. Constantly seeing that your assets have fallen in value may lead to a panic sell. Since emotions play a huge part in the market, it is wise to stay away from temptation.

  3. Scalping during a bear market
  4. Scalp Trading or Scalping is a short-term investment strategy. However, it requires advanced technical knowledge of crypto projects. For this, you need to research altcoins that are making a small but steady profit. Thereafter, you buy the asset and sell it as soon as it makes a small profit. An important point is not to get greedy, as a large dip may wipe out any potential profits.

  5. Make DCA your go-to during a bear market
  6. The all-time-favorite strategy for investors is to buy during the dip. However, no one can exactly predict when the dip would take place. The price you think of as a dip may potentially dip further. To beat this, you may opt for DCA or Dollar Cost Averaging. Instead of investing all your capital into an asset at once, buy a fixed amount of the asset at regular intervals. This will help average the cost of your assets and help you avoid the stress of timing the market.

  7. Diversify your portfolio
  8. Instead of putting all your eggs in one basket, you should try to diversify. Even if some of your assets are performing poorly, you still have the chance to recover some of the losses from profits gained by other assets. Research about altcoins and their use cases. Investing in projects with different use cases makes your portfolio less risky.

  9. Look for free ways to earn crypto
  10. During a bear market, some people prefer not to buy. However, you can still accumulate more crypto without investing. There are multiple ways to earn free crypto. If you already own crypto, you can use various exchanges for earning more of it for free. Staking, mining, and yield-farming are profitable tools to gain more crypto. Nevertheless, these methods require you to already have crypto assets in your portfolio which need to be locked away. If you do not own any of the assets, you can still get crypto for free. Learning programs, airdrops, bounty programs, and referral bonuses are some of the ways you can get free crypto.

  11. Save enough as a Cash Cushion
  12. The last but the most important tip is also the first rule of investment. Before you begin investing anywhere, ensure that you have a sizeable cash cushion. You should set this amount aside to take care of any unexpected financial emergencies. Also, never invest more than you can afford to lose. Furthermore, any money that you need to cover basic expenses should never be invested, no matter how lucrative the returns seem.

Besides, you only lose money when you sell the asset at a lower price than what you purchased it for. Hence, do not sell off your assets out of fear, and try to HODL. Unless you are direly in need of cash, do not sell your assets. Eventually, the market cycle would give rise to a bull market. Thereby, you would not only be able to recover what you had invested, but also make profits. It is key to understand that the trend of the crypto market is up over the long term.

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