Cryptocurrency Bear Market : The United States Central Bank chairperson Jerome’s speech turns a stable day of trade into a bear market. He says that the inflation battle even not yet close to finished. The whole Crypto market along with stocks are down by a huge number.
According to stats, trillions of money lost in the past few days. Investors are feeling a roller coaster situation in the market right now.
But according to crypto analyst and billionaires, The decision you make in the bear market plays a crucial role in your trading journey. It shows how long you can be sustained in the market.
In the recently held Bitcoin conference in France, Phillip from a Canadian firm speaks that, this is the time when miners should learn and build.
She also said that, instead of entering into crypto field in a bull market, miners can learn and earn from this situation better. Even, the Bitcoin mining equipment prices decreases a lot during this time. She also added, the upcoming “Ethereum merge” is a evolve of cryptocurrency ecosystem.
So, let’s dig into something informational;
what is bear market?
A bear market in any financial investment market ecosystem can be defined by a long time when assets value declined by a large amount of percentages.
There are three types of market definition according to different market graphs I.e, Bull market, Bear market and stable market.
Also read: Price prediction after Ethereum Merge
Reason for crypto bear market?
There can be multiple reasons for bear market. Some of them are:
- Political instability.
- Unemployment increment
- Strong Institutional influence
Crypto bear market history
Bitcoin is the leading crypto in the World dominating 39.56% of market currently. When Bitcoin price falls, almost every crypto falls to a certain percentages. If we talk about Past crypto market crashes story, the first crash which market witnessed was in 2011.
2011, The First Crypto market crash
Bitcoin crashed from $32 to $0.01 and then again climbs up to $32 later on that year. The first time Bitcoin touched below $1 in the history.
2015 Crypto bear market
Bitcoin crashed from $1000 to below $200. Firstly it was dumped to $700 when Chinese Central Bank cracked down on Bitcoin on late 2013. Then, the next two years were even worse for Bitcoin and the rest crypto market. Bitcoin price crashed to $170. Though, it returned to $1000 in 2017.
2017 Crypto bear market
At the end of the year Bitcoin touched its high of $20000, then it was subsequently dropped and lost over 60% of its value. In December, Bitcoin valued $3200. Source: Coingecko
2022 Recent Crypto Market Crash
Bitcoin’s ATH was about to cross its resistance $70000 but it then drastically dumped to $19000. Source: Coinmarketcap
What To Do in Bear Market?
Though there are several opinions related to recent crypto market scenario. From early 2022, this market is mostly termed as “The most volatile market”.
If you see cryptocurrency investment from a general trading point of view, there are not any big differences here. But, of course, the bear market hurts investors a lot here, as Crypto bears are more stronger than the others.
Fortunately, there are something which you should follow to avoid losses in masses during bear run. Check out by clicking our web story on that below:
Basically when a person buy crypto coins and thinks that the price will go up but it didn’t, then he just demotivates and spread nuisance in various places that Crypto isn’t a good investment?
Do you really think or, know any person who perfectly invested into crypto after a hell lot of researches and follow a certain methodology and still in loss of billion dollars?
No, you can not ! Because there are certain methods you should follow. We recommend using a method called ‘Dollar Cost Averaging‘.
What is Dollar Cost Averaging?
Well, DCA – Dollar cost averaging is a method of how you can survive in the bear market. We all want our cryptos to buy in the most dip zone, and sell in the most high zone. That makes sense as there will be most profit than ever.
But wait, that is not possible. No one can even imagine or know when and at what time a particular coin will be at it’s most dip and vice versa.
Here comes Dollar Cost Averaging, where we just buy our favorite coin multiple times and accumulate in our portfolio. First of all, we keep track of all the news related to that particular coin and set a certain time period and time gap of investing.
Time gap means, after how many days or months we’ll invest again into that coin irrespective of the price and time period means how long shall We invest into the coin.
Thus, we just buy any coin at the below average value every time. If you find this helpful, follow the method.
Build Portfolio Smartly by diversifying assets
One of the the top investor and business person, Warren Buffet once said “Your portfolio diversification is a protection against ignorance, it makes sense when you really understand.”
You should diversify your portfolio in such a way that a sudden fall to a certain crypto can not affect your wealth that much.
Think about your all investment on LUNA recently and it went to almost zero. But, if your portfolio is diversified and includes different assets of different percentages, then a single drastic change can not hamper your wealth much.
Stake Your Coins If They Allow
Coins like Cardano (ADA), Solana(SOL), Polkadot(DOT) uses PoS (proof of stake) mechanism and that is why they allow staking the coins.
Staking means you lock up a certain amount of coins on a particular network. You coins help validating transactions. For this, you earn rewards. That is where you earn money from staking.
So, The money you earn from staking can help you sustain in the bear market. Crypto staking is a good practice according to many investors.
How to make money in a bear market crypto?
There are several ways you can also make money from a crypto bear market. We will be talking about this descriptively later on a single blog post. In short :
- Buy the dip by using DCA. Many experts says, “My favorite coin is on sale” during bear market.
- Imagine you do not have a coin and your research shows you that the coin price is going to be dumped more. What will you do? Did you know that you still can sell the coin without actually having that coin in your wallet. The method is called short selling. Thus you can sell first and buy later.
- To make money in a Crypto bear market, you can give your crypto to a DeFi Platform like Coinchange. By signing up you’re actually become a liquidity provider. And these platforms give you rewards for providing liquidity to the platform.
Some FAQs related to Crypto bear market
When is the next crypto bear market?
Cryptocurrency tokens witnessed a big boom in the 2nd half of 2021. Then every coins dumped by a big percentages. The market is still bearish. According to some technical analysis, the market is goin to have a bull run by later 2023. And the next bear market could be by 2026.
What are the signs of a crypto bear market?
Any financial market crashes have several reasons. Every investor invest their money into any asset after enough research. When any institutional investor withdraw their holdings, price of the coin can be dumped. There are more reasons you should be aware like recession or inflation. So, anything like that in the US market are the signs of bearish run.