How to Survive and Thrive in a (Crypto) Bear Market

Bear markets typically strike fear in investors, as they connote periods full of uncertainty and pessimism. Although the price declines seem prolonged and endless, it is important to bear in mind that they are a natural phenomenon in any investment cycle – even in cryptocurrency.

To navigate the wilderness of the crypto bear market, knowledge and the right skills can illuminate your way forward. The following steps will equip you with effective bear marketing strategies to embrace bear market trading without being weighed down by doubt.

Spotting a crypto bear market

A crypto bear market is a period when the value of major crypto assets like Bitcoin fall by at least 20% from their previous highs and remain at that value due to fear and a gloomy outlook. It usually plays out in the following four stages: recognition, panic, stabilisation, and anticipation. Although it can be difficult to tell when a crypto bear market is starting, some tell-tale signs include:

• Low trade volume due to extreme fear

• Bearish technical and charting patterns

• Collapses of major crypto projects

While it might seem natural to stay out during such volatile times, crypto bear markets often present the best buying opportunities for long-term investors. If you are a beginner, you can look at diversifying your overall portfolio by investing in blue-chip cryptos and projects with solid fundamentals. You can also use dollar-cost averaging to mitigate market timing risks.

Reading the market direction

During a crypto bear market, it is important to gain a sense of the overall market sentiment and where the market is expected to head. According to crypto bear veteran and Bybit affiliate Daniel from Chart Champions who has more than a decade of stock and crypto trading experience, tools like the Fibonacci Retracement method to determine support and resistance levels have proven to be essential to investors in such times. To find out more about his bear market trading strategies and tips, read his Bybit Bear Stories, where he breaks down key concepts such as leverage trading.

For a specialist take based on notable trends happening in the crypto space, Bybit’s bear market report offers timely insights for investors looking to make the most of their circumstances. From revealing on-chain and off-chain activities to exploring how investors can weather the bear market with DeFi, its bear market analysis will help you better gauge the market’s health and aid you in your decision-making process.

Investing safely and smartly

Bearish seasons may seem bleak, but every cloud has a silver lining. Even in a downturn market, there are always windows of trading opportunities that allow you to grow your crypto assets with minimal risk. Bybit Earn trading products such as Bybit Savings and Dual Asset can support you in trading safely and smartly using low-risk strategies.

With Bybit Savings, you could earn stable yields by staking coins and tokens like USDT and BTC with competitive and guaranteed APY. It supports flexible and fixed terms so you can generate maximum returns based on your investment time horizon. If you are willing to take on more risk and are comfortable with short-term speculation, Bybit’s Dual Asset could net you high returns in markets with low volatility, with APYs reaching upwards of 100%. All you have to do is predict the direction of a specific crypto asset within a set timeframe and it will do the work of maximising your returns.

To learn more about crypto bear markets, get in touch with Bybit for everything you need to know.

This content was produced in partnership with Bybit.