4 Main Rules During a Crypto Bear Market
Bear market…Words that get every investor feeling unsettling. What is it exactly?
When a crypto bear comes, it means that the cryptocurrency price is dropping significantly in comparison to some time in the past. Usually, when there is a bear market, the bull market follows it, which means high prices and positive growth tendencies for many cryptocurrencies. It is hard for investors to focus only on what comes next though, as large amounts of money just disappear from the market. It might look bad for not only crypto, but any other assets, but, gladly, this is an ordinary period in every market’s life.
To get a better idea of what is a bear market period, we can compare the end and beginning of 2021. By the end of 2021, there was significant growth in the crypto market. Bitcoin hit the price of $69,000; Ethereum was very close to the $5,000 mark. But in the beginning of 2021 there were bearish trend signs. Bitcoin held around $30,000; altcoins were not at their best as well. Even now, Bitcoin is not even close to the $69,000 mark. When there are long and consistent price declines,we’re officially in the Bear market.
Fortunately, a bear market is not going to last forever, but it also won’t go away in a couple of days. What we should do is to find good trading tips and strategies to act, as well as ways to save some of your crypto revenue if you’re a business owner.
Here are some tips every investor should take when the crypto price keeps dropping.
1. Don’t ever panic sell. When the price drops, the idea of selling everything seems very appealing. Not everyone knows that by selling their assets, one risks losing profits when the price goes up. This is a rule with crypto and this is what makes it so different from stocks – the price will almost certainly increase again. All you have to do is have a little patience. It might be easier said than done, but selling will only lock in your losses. Get a hold of yourself and remind yourself why you’ve decided to invest in cryptocurrency to begin with – buy low and sell high.
If you own a crypto related business and feel like you can’t afford to lose any more money, you can always convert some of your funds to stablecoins. On Plisio, you can accept any kind of cryptocurrency you want with convenient conversion options. The Plisio payment gateway is the best choice for your business in the time of market volatility –you can save up to 80% on fees and use some of the best business tools designed for any needs.
2. Think about buying the dip. This tip corresponds well with what was mentioned earlier. Experienced investors do not just burst into tears when the precious asset price drops – they wait for the fortunate moment to buy the dip. This strategy is not suitable for everyone because there is no telling what dip is the one as the price might as well decline even more. For those who can’t just sit still and wait, there is another tactic – buying dips gradually. With every dip, you spend a maximum of $100-$300 on it, waiting for the following dip so you could do the same. By doing so, you won’t spend all your funds on one “false” dip, but cut some of the costs.
3. Diversify your portfolio and consider investing in different crypto assets. To predict the lowest of a bear market is as impossible as to know if the crypto you’ve invested in will ever hit all-time-high again. There is a little bit of gambling in the crypto investing business, but we were never told otherwise.
Diversifying your crypto portfolio means to trade in even smaller sizes to reduce risks of unsuccessful investment. Before buying a crypto asset, you must think about the following indicators:
Last all-time-high: Check the last all-time-high for your crypto assets and assess its potential. However, there is no guarantee it will return to the previous all-time-high, but it might give you some ideas.
Recent performance: Check the recent asset’s history and see its performance during the last market crashes. If it at some rate outperforms other identical assets, then it can be trustworthy. If there is a case of abnormal price increase and the asset is relatively “fresh”, you must think twice before investing in it, as it might be some hype coin.
4. Use your free time to expand your knowledge! While the bear is dominating the crypto market, you can use this time to learn more about crypto and its patterns. To know better how some assets are going to behave, you need to understand its essence. The deeper is your knowledge on the subject, the better are your predictions and investment skills.
One thing is clear – the cryptocurrency market is of a very volatile nature, so you shouldn’t be frustrated if you missed the opportunity to buy the dip or sold your assets at an unfortunate time. Make sure you learn from your mistakes and keep a cool head when the time comes. With a crypto market, you always have a second chance!
While you wait for the bear to go away, you can transfer some of the most volatile assets to stablecoins. It is especially useful if you’re a business owner and accept crypto. Plisio is a great crypto payment gateway where you can set a crypto payment option for various kinds of crypto, stablecoins included. Plisio offers some of the lowest fees on the market and is a fully business-oriented platform where you can easily save money and profit even during a bear market. Take care of your funds and always invest smart!