The Two Market Cycle: Why Bear Market Is An Opportunity.

Most veteran people says that a bear market is a life-changing opportunity for every investors. For everyone who still doesn't know what's a bear market and still haven't experienced it, here's a short explanation about it and some reasons why smart investors are making money in the bear market while newbies are losing money from it.

Two kinds of market cycle.

Image source: Quora.

Bull market.

This is the time where most cryptocurrencies are going up in value. Lots of people/investors are willing to spend money and invest in a cryptocurrency because they are thinking that the assets they want to invest in will still go up in value. In simple terms, this is the time where big money are coming into the cryptocurrency space.

During a bull market, we will notice that most crypto's price are just continuing to go up in an ascending direction. The higher it go up, the more people are buying and the more people are getting FOMO. Even people who doesn't have an idea about cryptocurrencies are getting interested in entering in the space and invest on it thinking that there will be an easy money in crypto and this is how greediness take place.

Bear market.

Bull market will not stay forever and many people will FOMO and ending up buying the top and losing money. And this is where bear market will enter where fears takes over the market and investor's feeling.

This is the time where we can witness the value of cryptocurrencies keeps on declining and the worst part about this is no one knows that we are already in a bear market and people still keep on believing that a bull market is not over yet and it will still continue. This will slowly kill people's portfolio until they realize that we are already in a bear market and will start selling their cryptos with massive loss

The confidence from people to invest in cryptocurrency is very low during a bear market because fears are everywhere and taking over. Because of this, it will cause for panic selling and the market will keep on declining because of it.

Why bear market is an opportunity for smart investors.

A bull market will not last forever and this also applies with a bear market. During a bull market, people are feeling fear of missing out and greediness are taking over them when they should do the opposite. And during a bear market is when people are panic selling and being hesitant to invest simply because of fears and negative sentiment all over the market.

But wise money/investors already know what to do during these times. Smart investors are building up their portfolio with the assets they like by accumulating it in every decline in price.

While newbies are panic selling and trying to save their money as much as they can, other investors keeps on buying.

Smart investors accumulate and but the assets through averaging and holding it until a new bull market starts. Others stake the assets in different platforms such as DeFis so while they are holding the assets and waiting for a new cycle, they are generating a passive income for themselves.

These kind of investors understand the saying "there's always a rainbow after the rain", this means that even though no one knows when will a bear market ends, a bull market is just waiting ahead. Investors know this fact very well that's why building up a portfolio during a bear market is way better than building up portfolio during a bull market.

Summary.

A bear market is not really the time to be in fear but since human's approach to the market tends to do the opposite, this became a reason why people are losing money in the crypto space. Smart investors use dollar cost average when buying a potential assets and always diversifying their portfolio. There are lots of opportunities in a bear market and during this time is a better time to build up wealth and hold the assets for the next bull market.