How to Make Money During Bear Market

Quick Summary

  • Bear markets teach people more than bull markets, and they can prove to be the best opportunities for your portfolio’s net worth. This blog is not about ‘surviving the bear market.’ It’s rather about making a profit when the market is bleeding.

Related: Where is the Bitcoin Bottom?

Everyone follow Bitcoin!

You can see the bear market as a cleanse, a purge. A lot of capital joined crypto markets during a bull run and it got invested into all kinds of projects. Many of them were Ponzi schemes and make-up projects created for the sole reason of making money from the token. As a result, all these projects that couldn’t prove themselves when the chips were down, went bankrupt. And it’s actually still happening, and the market is becoming cleaner. 

So why should you invest into crypto during a bear market? here’s and example. Many top altcoins like $SOL, $AXS, $SAND, $LUNA, and $MATIC were released during a bear market. Not much was happening for quite a while, but when Bitcoin reached its new all-time high, these coins were up 150x to 200x. Therefore, it’s the best practice to follow Bitcoin price cycles, and when it dips for a longer period of time, invest as much as you can. With that being said, the selection of a coin is still more important than your entry point. Buying a good project at a bad price is no big deal. But buying a bad project in the dip is still riskier. 

What to do

Follow the following steps to remain at an advantage in a bear market.

  1. If you’re not holding stable coins, consider staking your holdings. Divide your portfolio into at least five coins to stake and unstake your coins at the very first sign of trouble. Imagine not selling a coin like LUNA – it’s not panic selling. It’s called a safe exit.
  2. Analyze the trends and invest in the sectors that will pump maximum in the next run. For instance, a friend of mine invested in NFTs and P2E and earned huge returns. You might consider investing in the following sectors:
    1. GameFi
    2. NFTs
    3. Layer1/Layer2 Solution
    4. Launchpads
  3. Low-risk coins like Ethereum and SOL will offer smaller rewards. However, newer coins/tokens can go to 0 or 1000x – understand your risk endurance, need, and greed.
  4. There’s no rush. You have months to prepare for buying. Only invest which you can afford to hold for a longer period or lose altogether.
  5. Never go all in. Time the market, observe it and do dollar cost averaging. Bitcoin had been bleeding since December last year, so it’s a good move to have invested only up to 60% of your portfolio on hodl.
  6. Keep taking partial profits when the market is 8-10% up and buy again. RUNE is quite a volatile coin, and when Bitcoin is just 4% up, it gains 10% to 30% for a shorter period and then drops to support. To keep buying and selling it and making profits from these tiny moves is an idea to consider. Never fully exited the market; just take the partial profits.

Conclusion

To sum up, it’s a good idea to start to educate yourself and understand that the bearish trend is just a part of the market cycle. This blog is an editorial opinion and not financial advice. DYOR before investing.

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sources: Twitter

author: Tatiana Cernochova

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.