In this episode of BeInCrypto’s Video News Show, host Juliet Lima explains the three best strategies for surviving in a bear market.
When you hear the word bear market, what comes to mind? The standard definition of a bear market is a drop in asset prices by more than 20%. The good news is bear markets are typically cyclical, so even though they may last a few weeks, months, or in some cases years, eventually, they do end.
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In every crypto bear market thus far, there have been coins that have taken a hit, some that have gotten absolutely destroyed, and others that have even seen some growth.
If you diversify your assets, you are more likely to minimize your losses and take advantage of gains in growing markets. Diversifying your portfolio is a great way to spread out the risk instead of owning just one or two assets so that a major implosion in just one area wouldn’t be a total loss.
In the crypto world, there is an array of options. Investors can choose from stablecoins, large-cap market leaders, fast-growing new cryptos, DeFi-related coins, and tokens,
and cryptos associated with the NFT market.
The next of the strategies is “hold on for dear life.” The psychological toll a downturn in the market evokes can be grueling. The mind can work itself into a frenzy, should I sell? Is this the bottom? Imagine if I really DO lose all that wealth?
But having the mental fortitude to not sell is key. You need to endure the brutal price dips. The wild volatility swings a bear market brings. You must HODL. Do not sell!
Bear markets typically last 18 months or less, so there is bound to be relief around the corner. Keep what you have and don’t play dangerous trading games trying to time the market. Especially if you’re just getting into the space.
Dollar-cost averaging can seem like just too basic a concept. Simply buy a little bit over time regardless of the current price. But the simplicity comes to pay off.
When buying just a little bit at a time consistently, investors become much less emotionally invested than spending larger sums more sporadically. If a wild price swing occurs, there is much less psychological pressure to panic sell.
Over time, a dollar-cost averaging strategy smooths out the volatility from purchases at different price points throughout the investment period. A key to the strategy is to make sure to purchase the asset no matter what, despite perhaps feeling like money is being wasted during a bear market, buying so low. But when that price starts its upward climb the purchased crypto will prove a steal.
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