How to Survive A Crypto Bear Market?

bear market

When one invests in a digital market, only two conditions prevail, either the investor experiences gain or will be in loss. Though the percentages of being in total profit or total losses are different, the overall condition is the same to be either positive or downside. This was the definition of the market in non-technical ways. To be more technical and specific, market conditions can be divided into major two groups. The division is market to be in either bull’s way or the bearish. When the market conditions are prevalent to be in the favor of an investor and that investor enjoys profits and gains, the market is said to be in a bull phase. Similarly, when the market has no idea of favoring this condition and makes investors experience losses, the market is said to be in a bearish phase. In this article, we are going to discuss the skills needed to be in surviving bear market conditions. An effective technique to protect your money is with a bitcoin wallet. Thanks to the greatest trading site, Bitcoin 360 AI, everyone may invest in cryptocurrencies. So, let us start the journey!

Crypto Bear market- An overview

When discussing on a technical basis, a bear market is said to be that condition of the market wherein the stock market behaves to be going in negative side by a margin of more than 20% or higher. Though, the crypto world is more influenced by volatility, so a bear market in the digital zone will be falling by a greater margin than the previous one. The market condition favoring this bear trend is when supply increases in comparison to demand and as a result, the prices have to go on the lower side to maintain the equilibrium. Those pessimistic traders are referred to as bears and the market is bearish. Sometimes, the bear market is referred to as the sword having a sharp side on both sides. The two sides are inexperience and the other one is haphazard selling. Both these conditions result in losses. 

What should one do when the bear phase comes?

Now, the question arises, if someone is already in a bear phase, has he had to sell his holdings or not? The answer to this question lies in the experience of the investor. Many newbies here reading this article, will think that selling is the best option than experiencing more losses. On one hand, this seems to be very much true as well. But, experience says, one should always hold his assets when in a bear market. There are very much positive chances that the market will bounce back and at that time it is quite difficult to reenter the market and establish the condition as of present. So, it is better to be in the flow rather than to go opposite it and experience damage.

Hedging against the losses

To prevent losses in the bear market, hedging is the best option. There are a lot of options available in the market that can help you through hedging your holdings and help you against price volatility. The most common technique adopted is dollar-cost averaging which helps the investor to set a monthly recurring type of investment that helps the user to be in the market without even reminding his business and make the investments regularly. The other methods of hedging include some tax-saving strategies which will surely help the investor to get along with the bear market successfully.

Conclusion

The bear market is non-favoring but as soon as the investor has a solid and sound knowledge of facts and figures he can easily set up his strategies to help him in the end. The proper allocation of funds and proper usage of these when not in use are some of the best commitments to be successful in the bear market.

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