Tips on how to survive the Crypto Bear Market

Binusu Exchange
5 min readJul 20, 2022
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A crypto bear Market is a downtrend in the crypto prices. It is a period of time where the supply of an asset is typically greater than the demand. This is because the confidence is low, and prices are falling due to the pessimistic investors who are panic selling and also believe that prices will continue to fall. They are always referred to as “bears.” Bear markets can be difficult to trade in, particularly for beginners and inexperienced traders.

As prices continue to drop, investors simultaneously lose confidence that prices will not recover and start selling hence resulting in further downtrends.

Here are some of the tips on how to survive the crypto bear market.

Dollar-cost averaging (DCA) is arguably the best strategy that is proven to have worked exceedingly well even during the toughest periods of the bear market.

It is a simple but long-term strategy where you continue buying small amounts of an asset or crypto assets over a period of time regardless of the price. The strategy is based on the belief that prices will generally pick up the pace and eventually trend upward during a bull run.

Consider staking your coins.

When the going gets tough in a crypto bear market and your portfolio starts shedding value left and right, staking comes off as a good way to earn a passive income from crypto.

Staking basically refers to the practice of locking away your coins on a proof-of-stake (PoS) blockchain for a period of time and being rewarded for it. A good example of staking is Supercharging on Valora where you get 12% annual rewards on funds held in your Valora wallet(at the time of writing).

The best part about staking is that it increases the size of your wallet even in a bear market. That way, when the bull market resumes, you start with more than what you had previously. Besides staking, this also lowers the possibility of panic selling because your funds are securely and safely locked on a blockchain which is a good approach to a bear market survival strategy.

Diversify your portfolio

For investors who have a diverse range of crypto assets in their portfolios, the impact of bear markets may not be as severe. When the bear markets are fully in progress, the prices of assets generally plunge but not necessarily by the same amounts.

So, this is a valuable strategy that ensures that an investor has a mix of winners and losers in their assets or portfolio during a bear market run. Thus, total losses from the portfolio will be reduced to the barest minimum or even vice versa depending on the time the investor holds their assets.

Don’t try to time the bottom or buy the dip.

No one can accurately predict the bottom or the lowest dip but the best practice or approach is to study the technical and fundamental analysis or listen to experts, but at the end of the day, you may still have to rely on your gut feeling while trying to time the bottom. And as you will probably agree, gut feelings are not much of an option if you’re looking for strategies to navigate a crypto bear market.

You may buy at what appears to be the bottom at a given time. However, the price could further drop. And if it does drop, you will have to sell it again to have your next shot at timing the elusive bottom. More often than not, this strategy will only cause your portfolio to shrink

Take a break.

Whether you see the bear market as an opportunity to buy the dip or find falling crypto prices, it’s a bit too stressful to handle.

Always try to keep calm and assess the situation objectively. Emotional decisions are the ones that you will most likely regret down the road especially if you’re trading in a bear market. If you believe in the long-term potential of blockchain and cryptocurrency, it’s completely okay to take a break and disconnect from the crypto bear market phobia.

Maintaining a healthy state of being is very important. It’s easy to come up with many ideas for making money in a bear market. If you find that this is happening to you, do yourself a favour and take a step back for a while.

Go out for a hike, catch up with a friend or go focus on another hobby to get your mind off the market.

The ultimate decision

There are massive risks that come along with bear markets. But, they also offer a good basis for success in the next bull run. That is, however, dependent on good strategic investment planning mixed with patience. So, profits can be assured when the market finally turns around, whether you’re always DCA-ing, diversifying into other assets, staking etc.

Losing money is always a hard pill to swallow, but the best way to get through market dips is not by running. Instead, take note of the wide array of recovery options and keep calm.

Invest only what you can afford to loose

Having a proper idea about your risk appetite is important before you start investing in any crypto assets. This becomes all the more important with volatile asset classes like crypto. Investing is good to create long-term wealth, however, it is important to invest wisely.

No one wants to become the biggest crypto investor while sleeping on the streets. Invest only that much that you can afford to lose. One should always remember that bear markets and minor corrections can be destructive.

Conclusively, bear markets or crypto bear markets are not the end of everything. Have no doubt in mind as an investor or a trader. Some financial analysts say that the average bear market duration lasts for almost a year while others say it goes even beyond. However, by following the strategies discussed above, you will significantly reduce your chances of falling prey to crypto bears. Also, make sure to stick to the other basics such as always using stop-losses in case you are trading.

NOTICE: This is not Financial Advice. You should consider whether you understand all crypto and trading-related activities and whether you can afford to take the high risk of losing your money.

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