In the past few weeks, around $328 billion has been deleted from the global crypto market, and let us tell you; it’s even more than the market capitalization of Pfizer, the pharmaceutical giant that’s been making rounds since the COVID-19 inception.
Having said that, it doesn’t matter if you are a beginner or an expert investor in the crypto world, you are struggling with the falling market and might not be able to withdraw money either (unless you pay the soaring-high fee, of course).
According to the research, around 31% of the Ethereum investors and 28% of the Bitcoin investors have lost their money and are left empty-handed, which means the prices of these two cryptocurrencies are less than what people paid to invest in them.
However, if we look at Cardano, around 87% of investors are sitting with the red flags in their hands. To summarize, everyone is considering what the future of cryptocurrency will hold.
As for now, it’s pretty that the bear market has been created since there are prolonged declines in the prices, and the investors and traders have a negative sentiment. So, in this article, we are sharing what you can while crypto is stuck in the bear market!
Purchase Crypto Dig With Dollar-Cost Averaging
When it comes down to the volatile crypto markets, it is needless to say that it’s quite easy to shift to the wrong side of the trades, but it doesn’t mean that you simply have to sit at one place and watch the portfolio go down and down. You should also know safe Bitcoin trading tips.
The investors who have some fiat currency, as well as stablecoins left in their accounts, can use it to purchase the dip. It’s the ultimate rule of the crypto world to purchase cryptocurrency when the prices plummet.
As a result, when the prices go back to normal or simply increase, the investors will earn great profits. Well, according to Warren Buffet, you have to buy when there is blood on the streets.
Now, there are various ways of purchasing the dip – while it’s possible to opt for a single trade, it is suggested to opt for dollar-cost averaging, which is all about breaking up the reserve funds into small transactions and making multiple trades over the course of time.
The entire idea behind this approach is the difficulty of knowing which asset will bottom out and at what time, which is why spending all your money at one time is probably not a good idea.
So, with dollar-cost averaging, you can purchase a bit, and if the prices go down more, you can purchase more at less price later – now you will be able to make higher profits.
Utilizing Indicators To Identify The Entry Points
When it comes down to the investors who are aware of technical analysis, they need to predict the price movements of the assets, depending on the indicators, patterns, and chart trends to help determine when the asset will reach the bottom.
Still, we need to understand that no indicators can be fully foolproof, but they do provide a strong signal if purchasing during the bear market. For this purpose, the RSI indicator can also be used, and it has two primary concepts to be considered;
- Oversold – this is when the indicator line breaks below the channel, and the asset below is called oversold, and it shows that the prices will go up again
- Overbought – this is when the indicator line ho above the channel, and the asset above is known as overbought, and it shows that the prices will drop down
While it’s a common crypto practice that you have to invest in multiple cryptocurrencies to ensure the portfolio is well-diversified, many beginners don’t pay heed. However, during the bear market, it is better that you purchase different cryptocurrency assets that are likely to rise.
For this purpose, you might have to reduce the trade size, which actually reduces the chances of risks. But again, do focus on due diligence on every crypto asset before you invest and buy because going blindly doesn’t yield anything for anyone.
The Bottom Line
The bottom line is that the crypto market is extremely volatile, and it can be pretty frustrating to be stuck in the bear market. However, if you follow the tips mentioned above, you might actually gain benefits from the bear market as well!