We are witnessing the inevitable as far as Cryptocurrency Market Trading is involved. No matter how we all wanted an unstoppable bull market run, there must come a time when the charts will disappoint us.
The General Cryptocurrency Market has been in a steady dull condition for a while now. There has been over $965 Million in liquidation from the Crypto Market in the last 24hours. That General Cryptocurrency Market Cap has dropped below $1 Trillion from its all-time high of $3.08 Trillion in November 2021. Bitcoin, The King of the market, has also dropped its market cap below $485 Billion.
Bear Market is inevitable, and we want to show you how not to get wiped out during these times.
- Definitions: Bear Market – A bear market occurs when asset values fall over an extended period of time, causing one’s portfolio to lose value. In a bear market, the supply of an asset is usually more significant than the demand because many investors called ‘bears” begin to sell off losing assets to avoid additional price reductions.
- A bear market is the polar opposite of a Bull Market. It occurs when the price of an asset or asset class rises for an extended period, increasing your portfolio’s value.
#1 Emotional Control
The first thing to do in a bear market is to get your emotions in order. This is because you’re already losing a lot of money, and of course, you can enter into panic and make further harsh decisions. This is mainly for traders who want to make “quick gains.”
A suitable approach is to understand that these are different seasons. It’s called a ‘season’ because it doesn’t last forever. Sooner or later, we will go back to the mooning days, but for now, you need to stay calm and understand why you’re in the Crypto space first. If you believe the space is here to stay and it’s the future of Finance, you may have to stick around for a while. You may need to steer clear of any trades as of now and watch and learn what goes on.
#2 Dollar-cost averaging (DCA)
Dollar-cost averaging, or DCA, is undoubtedly the best approach that works effectively even in the most challenging bear markets.
It’s a straightforward but long-term approach in which you buy small amounts of an item over time regardless of price.
We have an entire article on Dollar-cost averaging, or DCA, and how to use it in a bear market.
Dollar-Cost Averaging takes the passion out of investing by focusing on contributing a fixed amount of money over a set period of time, independent of asset prices. It’s worth noting that Dollar-Cost Averaging works for assets that appreciate in value over time.
#3 Trade Futures
Caution – Do not go into Futures Trading without proper guidance and understanding; this can be extremely risky as you risk losing your entire portfolio.
Futures Trading is an excellent and quick method to make or break your portfolio, so tread carefully on these thorny grounds.
Leverage refers to using borrowed funds to expand your trading position beyond what you could do with your resources. That is, the more the leverage in futures trading, the more gains/losses you will make on your position, but the narrower the range before your position is liquidated if the market goes against your bet.
If you really must trade futures, proceed with extreme caution and guidance. It’s advisable to take hands off any trading as emotions will clearly be on a high note.
In fact, it is more important to keep up with market developments and maintain current awareness. You’ll have the best chance of positioning yourself appropriately and minimizing losses.
#4 Research On Evergreen Projects
There’s never a wrong time for studying and learning. This is the right time to go deep into much study if you believe the space is for the long term.
It’s important to note that crypto projects don’t stop building even in a bear season. Many projects are still building, and many NFT projects are still full of hype. This is the time to start researching evergreen projects that’ll do well in the long term. Aside from the knowledge you get, you will also get to distract yourself from the current noise (FUD) in the market.
While market conditions appear to be in a mess, there are still some virtual real estate or various Metaverse/NFT projects to study.
In June 2022, we selected the Top Three Metaverse Crypto Coins with a market cap under $10 million to keep an eye on. We also have Top Three Metaverse Crypto Coins Below $1 to buy during this bear market.
The harsh reality is that an investor or trader will lose money from time to time. You will considerably lower your chances of falling into the hands of crypto bears if you follow some of the steps outlined above.
We can do reasonably well with these alternative tactics during periods when many others are experiencing significant losses in their portfolios. For the time being, stay safe! We’ll be back soon!
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency.
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