Accumulate, DCA or Stay Away: What Are Your Plans During This Bearish Market?

Sanctions, inflation hike and war are making global economic problem and financial markets are reacting to it. Stock markets reacting and the 2-year bearish trend was even more triggered when 2022 came in. Cryptocurrency also correlates with stocks and other markets but gets affected more than any other assets since crypto is still an speculative assets and it has more volatility in price.

Starting with Bitcoin that losses over -25% of its valuation in just a month, and as a top cryptocurrency where most altcoins correlates with it, altcoins were also seen a massive sell-off and losing much more than Bitcoin.

What triggered the bearish crypto market?

Aside from the fact that Bitcoin and cryptocurrencies reacts on how other markets performs, what really triggered a ripple effect in crypto was all because of the genius attack to TerraLuna's native assets - $LUNA and its stablecoin $UST. And here's a summary about it.

$UST, a stablecoin backed by Bitcoin losses it peg to $1.00. In order for $UST to regain its peg, Terra sold its Bitcoin reserves which give a huge effect in Bitcoin's price. The massive sell-off in $UST was too much pressure that Terra needed to announce about minting more $LUNA to sell in the open market just to peg $UST again to $1.00. This caused so much panic to $LUNA holders and its price tanked and was down to -99% in just less than a week.

As of this writing, $UST that was supposed to be a stablecoin pegged to $1.00 is ranging around $0.60 while $LUNA is just over $0.10 - this will be an another history for the cryptocurrency market as one of biggest downfall of one of the largest market cap project in crypto. Currently, there are rumors that $LUNA token might be the sacrificial piece and will eventually lose its value in the market since Terra are more prioritizing $UST than $LUNA.

What's happening right now with Bitcoin and cryptocurrencies are the ripple effect from global markets and Terra selling its Bitcoin reserves. Altcoins are experiencing massive decline in price and losing so much value making the crypto market in total control of bears.

What should we do?

There are so much volatility right now in the market and if you are not an experienced trader who can see opportunity from it, it would be better to stay away from margin and leverage trading.

If you are one of the million people in the world who truly believes in cryptocurrency and saw its potential in the long run and has the means to invest, a bearish market can be an opportunity.

There are two of the best ways to take an advantage during this kind of market:

1. Dollar Cost Averaging - no one knows when will this downward market will cool off or when will the market recovers. If you are buying the dip, do not put all your money in one set up. If possible, put a certain percentage of your capital in an asset you truly believed in. If that assets dropped even more, add another percentage of the capital and so on to average your buying. This way you can take advantage of every dips but you must remember that the money you used is the money you wouldn't be needing in the next coming months or years.

2. Accumulate - using DCA can also be noted as part of accumulating but this one will be different. What I mean with accumulate is to get those cryptocurrencies that you can get for free. Crypto faucets, crypto giveaways, crypto social platforms that rewards users with cryptocurrencies are one of the best thing to start with. With the current market situation, every cents of crypto you get for free can make a difference when bull market resumes. Accumulate what you get and hold it until you want to sell it is one of the best strategies you can do during this kind of market.

Ending words.

There are lots of potential coins or projects out there that are currently at a very discounted prices. I'm accumulating cryptocurrencies that has real-world utility such as Bitcoin Cash, CEX tokens like $BNB, $CRO, $KCS and more. Lots of potential altcoins right now in the market and all you need to do is to choose the right one and hold it strongly.