Volatility is an inextricable part of cryptocurrencies. These assets are subject to pure market forces and reflect price turbulence. Unfortunately, volatility can rear its ugly head and cause cryptocurrency markets to plunge into a full-blown bear market. This piece will highlight three things to do in a crypto bear market. Crypto gambling enthusiasts on BC GAME know all about this level of volatility. Sometimes an asset you hold appreciates. Other times it depreciates. A period of prolonged price slump is called a bear market. It is the equivalent of recessions in mainstream markets, only that there are no bailouts in this industry to shore things up. Recovery is organic and will depend on technical and other intrinsic trends.
Given this market’s high volatility, it may take time to know that a bear market is on. The term bear market usually refers to any period of negative return where prices dip more than 20 per cent from recent highs. However, Bitcoin can drop by double digits within a week and rebound in the next one. Nonetheless, periods of significant downturns in specific cryptocurrencies can happen, and one must know how to deal with such events.
Read on to know the things to do in a crypto bear market:
Don’t Make Emotional Purchases
During a bear market, panic sets in among traders. That is only natural when a person feels like they are losing money. This period may allow intelligent crypto enthusiasts to make suitable decisions. One way of making smart decisions is not making the wrong ones. Making emotional purchases in a crypto bear market can be like running in quicksand. That is the time to stick to the plan. If you were an analytics person, remain on that path. This strategy ensures that you keep an even keel when things appear rocky. It also helps to know the history of crypto markets and that downturns don’t necessarily mean Armageddon. Fear of missing out (FOMO) is a phrase that describes such impulsive purchases.
Sometimes, one decides to chase losses like a gambling addict on their last leg. FOMO can be a powerful drug, turning a bad time into a full-blown catastrophe. During bear markets, fear, uncertainty, and doubt permeate crypto markets. Some causes of this behaviour can even be rumours with no substance. Many ‘crypto experts’ on Twitter will go on a tangent with the most flimsy data to back it up. Don’t rely on optimism alone to make trades because you could get carried away with wishful thinking. Always focus on the fundamentals to make coherent moves in a bear market.
Diversify Your Cryptocurrency Portfolio
There are thousands of cryptocurrencies in the world today. They don’t always have the same price because of differing fundamentals. Therefore, if your favourite token is in the deep red during a bear market, it may be time to stop flogging a dead horse. Not all cryptocurrencies will take the same beating during a bear market. Use these gaps to your advantage. Most people will know the significant cryptocurrencies that always take up the headlines. Emerging coins may have a better upside shortly than the one you place all your bets on.
Similarly, you think a coin is on the cusp of something great, but it is just not happening. Therefore, diversification can be the best ally you have. You will need something to cushion the blows during a bear market. A portfolio with many complementary assets provides functional balance even in a brutal market. No matter how much you believe in a particular purchase, don’t invest more than you can afford to lose. Diversification is the safest way to navigate this problem and have a healthy investment chart.
A bear market should not cloud your imagination only to see the next few moments. It should instead be the catalyst for long-term crypto analysis and investments. Legendary billionaire investor Warren Buffet made some of his best long-term decisions during recessions. During bear markets, focus on long-term decisions alongside the patchwork decisions you may have to make. Long-term decisions are likely to be more coherent and aim to generate growth. They also encourage cultivating discipline, an essential part of portfolio growth. Bitcoin is the perfect example of this approach. Long-term Bitcoin holders have seen gradual growth even though there are occasional pitfalls.
Meanwhile, those that get in and out when they hear things are good can get the short end of the stick. Have an eye on long-term crypto wealth management to have a chance. This strategy can prove fruitful even though it may call for delayed gratification. It would be best to focus on where a token may be in years instead of the prior week’s events. Long-term investing also means you need to invest an amount you may not need to liquidate in the short term. Therefore, endeavour to make long-term plans for your portfolio. Daily trading is bold and can be rough during a bear market. Long-term planning leaves you with a few high-quality periodic decisions that are not likely to trigger further suicidal moves.
The Big Picture
There is no magic formula for avoiding losses when handling cryptocurrencies. Nonetheless, you can take measures to stop the bleeding when it occurs. The above tips help you build back and provide the crucial pivot away from more bad decisions, especially for online casino players on BC GAME placing stakes. That is the essence of navigating bear markets. If you become stubborn and try and chase losses, you may end up in a vicious cycle. Instead, aim to teach good habits and make the most available opportunities.