The cryptocurrency market has been in decline for over a year and the downtrend shows no signs of slowing down. The entire market’s capitalization saw over $700 billion wiped off the sheets, as a lot of the currencies marked losses upwards of 90 percent. But this doesn’t mean it’s impossible to be profitable. Here’s how to survive the bear market and to make the most out of it.
Don’t Limit Yourself to Just Cryptocurrencies
You need to remember that it’s not just cryptocurrencies that you can trade. As the market is going down, or moving sideways, you can take your time and trade other asset classes such as commodities, forex, indices, and so forth.
Make the most of your time, instead of just waiting while sitting on fiat currency or stablecoins. You can even do so using Bitcoin.
Evolve Markets, for example, is a trading platform which allows the user to trade legacy markets with leverage, using their BTC as capital. Naturally, the profits and the losses are distributed in Bitcoin but you can engage in trading everything from Twitter stocks to silver and gold.
Use Different Trading Strategies
It’s not necessary for your asset of choice to grow in value in order for you to make money. In fact, it’s also possible to profit while the price is going down. These are some of the common trading strategies that can be used in order to capitalize on declining prices.
- Shorting
A short seller will profit if the price of the asset goes down. The trader sells to open the position, expecting to buy it back later at a lower price, while keeping the difference as a gain.
Shorting different altcoins on cryptocurrency exchanges such as Evolve Markets, for instance, is a convenient way of making profits in a bear market.
- Scalping
Scalping is another approach, which is oftentimes seen as a sub-category of day trading. This strategy targets minor swings in the intra-day price of different cryptocurrencies.
Traders are known to enter and exit throughout the trading session in order to accumulate profits.
Naturally, scalpers would indulge in a range of different trades, depending on the current market condition, in order to build up their profit. In addition, the limited time exposure to the market is known to reduce their risk.
- Swing Trading
Swing trading requires the trader to identify a certain trend and capitalize on it. It doesn’t matter if the asset is going down or is growing in value, as the trader can alternatively short it.
Swing traders are known to follow the trend. If the trend is for the asset to grow, they would go long, and if it is a downtrend, they’d short it.
- Hedging
Hedging is a more conservative approach to achieving protection in a bear market. To hedge means to make an investment in order to reduce the risk of adverse and prominent moves in the price of an asset.
There’s Permanent hedging, which involves you holding the position throughout the entire time, and there’s also Timed hedging which is done using technical analysis in order to navigate through the volatility during a bear market.
Be Thoughtful When Selecting a Broker
As you can see from all of the above, there are plenty of things you can take advantage of in order not only to survive the bear market but also to make profits while it lasts. However, having all that in mind, you’d also have to make sure that you are using a reliable and, most importantly, a broker which can cater to your needs.
In other words – choose a broker which supports all of the trading options, and preferably more, that you’d need to execute your plan during the bear market. Make sure that the platform you are using supports CFD trading, margin trading, and all of the options that are outlined above. It’s also important to see whether or not the trading platform supports the necessary amount of trading pairs.
Evolve Markets, for example, offers all the needed trading options and functionalities to guarantee for a reliable trading experience. This way you can be sure that you will have the necessary tools to benefit from the current market conditions.
Learn From Your Mistakes!
“Fool me once – shame on you. Fool me twice – shame on me.” That’s the saying you need to cherish while trading. Everybody makes mistakes and you will lose money while trading – there’s no way around it.
However, it’s critical to make the most out of every single mistake you’re making. This goes for all of the trading options, regardless of whether you’ll be shorting an asset or going on it long. Most of the brokers allow the opening of a demo account. It’s not a bad idea to explore that option in order to test all of your strategies and to see what works best during different market cycles and conditions.
[Disclaimer: The contents of this article are for educational purposes only and should not be taken as financial advice. Always do your own research before investing in new projects and always keep your Bitcoin private keys secure.]
What are your survival tactics during a bear market? Don’t hesitate to let us know in the comments below!
Images courtesy of Shutterstock
SIGN UP FOR LIGHTCHAIN 2025 - BUY NOW