5 Things You Must Do to Earn Profit in Crypto Bear Market

Follow these five steps to stay profitable in the crypto bear market.

The crypto industry is extremely volatile, which is ironically one of the things that makes it fun, especially if you are a trader.

While volatility is one of the hallmarks of the crypto market, it is not necessarily a good thing because things could turn for the worse.

When things do not go according to plan in the crypto market, it most likely leads to a bear run, and it could be like that for a while.

A bear market is not a good time in crypto, and most of the time, you might not even know the market is on a bear run, especially if you are not an experienced trader.

However, in this piece, we want to highlight the things you can do in a crypto bear market and how to stay profitable.

What is a Crypto Bear Market?

A crypto bear market is a period when the market value of crypto assets declines over a long period of time. The easy comparison is that it is almost the same as when an economy or stock market enters a recession.

However, it is important to note that it is not called a bear market unless the decline goes on for a long period of time.

The most devastating bear market remains the 2017 crash, which saw the huge crash of Bitcoin before picking up again in 2021.

5 Things You Must Do to Earn Profit in Crypto Bear Market

Now that you know what a crypto bear market is, what are the things you must do to survive the situation, given that your assets will most likely take a huge hit?

Be calm and do not make any irrational decisions

Yes, it is normal to panic once there is a crypto bear market because you are not sure of what to do. However, one thing you should do in most situations is to do nothing.

Monitor the situation first and find out what caused the bear market. Most times, the reason for a bear market or recession is due to a natural disaster, geopolitical crises, or poor economic polices.

And like that famous saying, tough times never last, tough people do. So the best thing to do in a crypto bear market is to do nothing.

Watch the situation carefully before making a decision. Also, you can seek expert advice if you are not sure about what to do.

Doing nothing allows you to think carefully and not make irrational decisions. Imagine the loss of those who rushed to sell their assets during the COVID-19 pandemic after Bitcoin crossed the 100k mark.

For those who stayed patient and kept their assets, it was a win for them. However, for those who rushed to sell, they not only took a loss, but they also missed out on a massive profit.

Diversification

Once you have carefully assessed the situation, the next thing is to find a way to diversify your assets.

While bear markets do not last forever, it sometimes takes a long time for the market to be stable again.

As a result, you should consider the diversification strategy. Diversification simply means investing in different coins.

There are over 100 cryptocurrencies in the crypto market right now. So, if Bitcoin is experiencing a bear market, diversification will help you cushion the loss you will suffer.

Buy the dip

If you have a high tolerance level for risk, a bear market might actually be the best time to invest in some coins.

For example, traders who took advantage of Bitcoin’s prices between 2017-2020 made a considerable profit after the price picked up again in 2021.

As a result, if you are ready to play the long game, then investing in the dip is actually a smart move during the bear market.

Invest in Stablecoins

Unlike other cryptocurrencies, stablecoins are not volatile. So, investing in stablecoins is another way to go in a bear market. It helps you maintain liquidity and gives you peace of mind.