Investing in cryptocurrencies during a crypto bear market can be hard. When the market is bearish, crypto prices can stay at lower levels for weeks, or even for months. It’s a completely normal thing, and that’s just how the market behaves – the prices can’t always only go up. For experienced investors, bear markets can be an excellent investment opportunity. But what exactly should you do in a crypto bear market?
The most important thing during a crypto winter is to not panic. Cryptocurrency prices have fallen down numerous times in the past, and sometimes crashes can happen very suddenly and massively decrease crypto prices in an instant. But it’s not really something that you need to worry about in long term.
Cryptocurrencies are new asset and very volatile. The prices can suddenly go down, but they can also very quickly go up. When the prices are lower, tons of people see it as an opportunity to buy, and the increased demand causes the prices to skyrocket again.
In other words, the fact that the price of your favorite coin or token dropped by 10%, 20% or even more is not the end of the world. As long as the coins have strong fundamental, It’s very likely that the price will start increasing again in future. The worst thing you could do would be to panic sell at the bottom – then you would definitely be at loss. But if you just be patient and HODL for long term, you will soon make profit again.
2. Accumulate More Crypto
For beginners, a bear market is a reason to panic and sell their crypto. But experienced investors and crypto whales do the opposite – when the prices are low, they go and buy more.
The reason for that is simple: a bear market allows you to buy cryptocurrency at huge discount prices. Let’s say that you bought some Bitcoin at $40,000, and the price is now below $20,000 – why not buy some BTC at over 50% discount? This is exactly what crypto whales do – they buy cryptocurrency when it is cheap, and that’s why they have more crypto than anyone else!
3. Diversify Your Portfolio
When a bear market happens, the prices of most cryptocurrencies usually go down at the same time. This happens because smaller tokens tend to follow the trends set by big coins like Bitcoin or Ethereum. But “most” doesn’t mean “all” – even during a crypto winter, the prices of some coins and tokens not only stay up, but even grow.
It’s almost impossible to perfectly predict what the prices of each specific crypto will do, so the best thing to do is research the fundamentals and diversify. If you only have one or two coins, your portfolio will definitely lose some value in a bear market. But if you have 10 or 20 top different cryptocurrencies including stable coins, you can stake for savings and earn income that might protect your portfolio from the drastic drop in value during crypto winter.