5 bear market trading strategies

The spring rumors about the coming crypto winter only a few months ago did not prove to be true. The bear market has overcome the crypto world and has been with us for a few weeks now – most traders have stopped panicking and are now exploring the best ways to make some money. In today’s article, CoinCasso is sharing effective investment strategies for bear market trading.

Bear markets explained

Bear markets and bull markets are just the opposing stages of the business cycle. It’s possible to remain profitable in both markets if you’re following the right investment strategy.

So, what is a bear market?

It’s a period of recession when the prices go down. Bear markets are typical not only for cryptocurrencies but also for real estate and the stock market. If a bear market catches inexperienced traders by surprise, they can easily lose all their investments.

For more information on bear markets vs bull markets, click here.

What are bear market strategies?

Bear market trading strategies are the steps and plans for surviving and gaining profit when the assets’ pricing is decreasing for a long time. These strategies work wonders for both newbies and experienced investors in different markets, including the crypto industry, stock market, valuable papers, and so on.

Tips on how to save your investments in bear markets:

• keep calm and don’t panic
• stay calm and re-evaluate the market, your assets, and investment possibilities
• take time to make thorough research and invest wisely

The best market trading strategies

Now, let’s get straight to business and discuss the successful investment strategies for a bear market.

1) Take care of a diversified portfolio

Unlike the bear market, this piece of advice is unlikely to take anyone by surprise. The saying “Don’t put all your eggs in one basket” has been around for decades for a reason. No matter whether a market is bearish or bullish, it’s always best to prevent huge losses by investing in different assets.

When it comes to cryptocurrencies, invest in at least a few different coins. Such an approach can save your money – in case a few coins drop down, another one can keep the same price or even increase in value.

2) Consider dollar-cost averaging (DCA)

This strategy is especially beneficial for long-term investors who plan their financial management a few years beforehand. DCA is about investing the same sum regularly despite what the market sentiment is. Due to the market crashes, the average asset price one is purchasing will be averaged.

3) Invest only what you can lose

The crypto industry volatility is almost legendary now. During the past three months, even Bitcoin’s price decreased more than twice: from $47’000 at the end of March to $19’600 at the beginning of July. Trading, especially if we’re talking about cryptocurrencies, is always risky. If one cannot afford to lose funds, it’s best to avoid investing in coins.

4) Look for good values

There’s a common misconception that a bear market is not profitable at all and one should just wait till it’s over. Nevertheless, every stick always has two ends. The same goes for bear markets. Even though the value of most coins is falling, there are still interesting and potentially profitable projects to look at. A bear market is a perfect opportunity to purchase some cryptocurrencies at a low price and sell them in the future when their value will go up. It’s also good timing for implementing such a strategy because the majority of investors are desperately seeking ways to save their funds and assets rather than exploring new market opportunities.

One more investment option is crypto exchange shares. CoinCasso has been on the market for 3 years and survived numerous market crashes. No matter what the market sentiment is, our exchange platform remains profitable due to the number of crypto transactions. This week, we’re starting our first-ever crowdfunding campaign with one of the most famous crowdfunding platforms in Europe. Invest in CoinCasso and gain passive income in any market conditions.

5) Staking

Staking is locking up your cryptocurrencies on a proof-of-stake blockchain to verify the crypto transactions. In such a way, one can safely make passive income even in a bear market. Moreover, the staking also makes your wallet larger. Consequently, if you are lucky to avoid panic selling during bear markets, you will have a higher number of coins when the market recovers and becomes bullish.

FAQ

Can you make money trading in a bear market?

Yes, both bear and bull markets are profitable if one makes smart investment decisions. A bear market is characterized by falling prices - this works for all kinds of markets: cryptocurrencies, stocks, real estate, etc. The winning strategy here is to buy assets at low value. During a bull market, the prices are rising and, thus, one should sell assets to gain profit.

What should I invest in when the market is bear?

One of the best investment strategies for bear markets is to buy assets with big potential. That is, investors should make a detailed market analysis and look at the stocks, coins, etc. that will likely increase in price in the future. However, keep in mind that this is a long-term investment strategy rather than a fast way to make money.