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Some tips you should practice in a crypto bear market

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Avatar for Kolus290
Written by   13
1 week ago

In the global cryptocurrency market it had over $320 billion in losses so far in the big bear market we are experiencing right now guys and this to be as transparent as possible, it started on Friday. That's a lot more than the huge market capitalization of the master of the pharmaceutical business called Pfizer. Many investors around the world, both those who know nothing about investing and the big investors, have been caught up in the big bear market decline that we are experiencing right now and they will not be able to do anything to stop it without resorting to big losses, this we have to keep in mind if or if.

Many technical analysis companies claim that more than 25% of all bitcoin investors and more than 30% of Ethereum investors are in a process called "out of the money" at this very moment of the bear market guys, and this means that both cryptocurrencies are currently priced much lower than what they paid for them at the time. If we talk about another crypto asset such as Cardano, well over 85% of all investors are in very serious losses guys, as is the case of UST, I went crazy when I saw the charts.

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Many technical analysis companies claim that more than 25% of all bitcoin investors and more than 30% of Ethereum investors are in a process called "out of the money" at this very moment of the bear market guys, and this means that both cryptocurrencies are currently priced much lower than what they paid for them at the time. If we talk about another crypto asset as may be Cardano, well over 85% of all investors are in very serious losses guys, as is the case with UST, I went crazy when I saw the charts.It is very easy to be wrong when in a cryptocurrency trade and even more so when the all markets become wildly volatile guys, but this has nothing to do with a meaning that you have to sit with your legs crossed drinking a coffee while watching your investment portfolio plummet wildly.

The best investors who have some reserves of fiat currencies or stablecoins in their portfolio, or who have a lot of expendable capital in some of their bank accounts, will have a great chance to "buy the fall" so to speak guys and this can be interesting. This great phrase in very common and widely used throughout the cryptocurrency industry and everything that refers to the practice of acquiring cryptocurrencies every time there is a significant downward correction in the market.

For some of the buyers, the sole purpose of buying the dip is to make a nice profit just as prices return to their previous highs. This strategy is in line with the teachings of stock trading legend Warren Buffett, who once said, "When there is blood in the streets, buy."

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Although buying the drop can be done in a single trade, the most recommended strategy is to implement something called dollar cost averaging (DCA). This involves dividing your reserve funds into smaller tranches and making several trades over time.

Let's say you have $1,000 in reserve funds, for example. A good DCA strategy would be to divide the amount into five $200 tranches or even 10 $100 tranches, and then make trades on those smaller amounts.

The idea behind this is that it is incredibly difficult to know exactly when an asset has bottomed out - i.e. reached the lowest price before reversing - so rather than spending all your money at once it usually works better to buy a small amount and wait to see if the asset price falls further. If that indeed happens, you buy a little more, and so on.

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For investors with a basic or superior knowledge of technical analysis - the practice of predicting an asset's price movements based on trends, indicators and chart patterns - it is possible to use certain indicators to gauge when an asset has bottomed.

Of course, no indicator is completely infallible, but they can often give a strong signal of when to buy a dip.

To detect a bottom, you'll need to see if the RSI line shows a higher high while the corresponding price shows a lower low. Ideally, the RSI line will be near or within the oversold region on a longer time frame, such as daily, to signal a strong reversal opportunity.

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Just as it is nearly impossible to accurately predict the bottom of a bear market, it is also impossible to know exactly which of the 17,000+ cryptoassets will recover the fastest or have the biggest rally.

One way to hedge your bets is to use DCA for a range of different assets. This could mean reducing the size of your trades, but, in doing so, you will also reduce your overall risk. Of course, it is not enough to just randomly select assets and invest in them.

That's all, thanks for reading!

Kolus290.

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