Trading in a bear market

Winter is coming! Are you ready? Find out how to survive when trading in a bear market.

Trading in a bear market

Lions, tigers, and bears - oh my!   It seems the bear is taking the lead this time.  

That’s right, my friends. We have officially entered a bear market in crypto. 

What is a bear market?

A bear market occurs when supply is greater than demand. Assets are on a steady decline, often characterized by a 20%+ dip. Trader confidence has taken a hit, sentiment is low, and the market is reflective of it all.  

The term “bear market” is thought to originate from how the ferocious beast strikes down its prey. The bear swipes its paws in a downward motion, in a similar manner to how prices fall. 

On the opposite end of the spectrum is everyone’s favorite - the bull market. As you can guess, the name also derives from how it attacks its opponent. The bull thrusts its horns into the air just like the overall movement of the market.

Both animals are known for their immense power and strength, which carries over in their market cycles.  

Proceed with caution

Contrary to popular belief, a bear market isn’t all bad news bears. Some traders thrive in these conditions. However, trends aren’t always your friend - especially now. That’s why it’s always best to proceed with caution. 

Bear markets can be near impossible to predict and nobody wants to be the fool who bought the dip, but it kept dipping. 

So, what’s the trick for surviving a deadly bear market?  Here are four for you:

Smart trading

A common trading method for downward cycles is dollar-cost averaging (DCA). This strategy intends to lower the risk by slowly accumulating the asset at regular intervals, irrespective of the price. While DCA can lessen the impacts of volatility, it can mean missing out on higher returns over the long run. 

Crypto Snyper applies a DCA trading strategy coupled with data analysis of price channels. This means traders can better target the bottom based on cycle trends and patterns. The system also incorporates a martingale mechanism that increases buy amounts as coins dip further. 

Diversify your portfolio 

It’s true what they say, “don’t put all your eggs in one basket.”  Especially when trading in a bear market. 

Use this time to expand your investment portfolio and explore various asset classes - yup, even beyond crypto. 

Diversification is key. 

By having a mix of investments under your belt and remaining even-keeled you can increase your chances of coming out on top. Plus, wouldn’t you rather have a mix of winners and losers, rather than a single investment that totally tanks? 

Sharpen your skills 

If trading in a bear market seems far too unnerving; don’t worry - you’re not alone. 

Many successful investors use this period to learn, conduct research, and enhance their trading skills. Explore projects in-depth that you perhaps once considered. Check out a company’s roadmap, emerging tech, and hey - maybe actually read those Whitepapers?    

There’s absolutely nothing wrong with hanging on the sidelines and scouting out potential investments for a later period.   

Revisit your trading goals and explore new tools to further your chances of success. 

Never give up

Last, but certainly not least - never give up. 

Trading isn’t, and never will be all sunshine and rainbows. It’s easy to feel down if prices are low and gains are minimal. However, the market fluctuates in cycles. Though this period may seem never-ending, it will at some point end. 

Stay strong - many of the BEST long-term gains are generated from trading in a bear market.