There are many warning signs we are very late in the current growth cycle of the BTC price and we could soon be about to enter into a steep bear market.
The current BTC chart looks very similar to the late phases of an economic bubble as first defined by Charles P. Kindleberger.
At this point in time, those with significant exposure to BTC or correlating assets who would like to avoid large fluctuations should be watching out for price breaking under the $44,000 level. This could be the last opportunity to take actions to prevent further losses.
If there is another breakout instead of a rally into new highs, we'll be completing the "Neck break" of a head and shoulders pattern.
Tips for a bear market.
1 - Options. At this time someone with a lot of exposure to a bear market could buy some put options on assets they own. I can't go into specifics on this. Because the options market in crypto is still pretty under-developed I've not gotten involved enough in it yet for that.
What I can say though is right now the OTM put options are probably pretty reasonably priced even if you were buying them for 6 months out. They'd probably pay out somewhere between 30 and 50 * what was put into them in the event of a big bear market. This gives a portfolio insurance cost of 2%.
2 - Futures. Futures trading is a bit harder than options because with an option you just have to buy the option and wait. Futures can require a bit more effort. But this is where I can get more specific information which I hope can be of some use, should it be needed.
The simplest trade is to place a pending order (A sell stop order) at 39,000. Place a stop loss on this trade over the high and then place a take profit around $16,000. This trade will pay off 1:3 what you risk on it. This is the lowest risk trade (By risk here I mean chances of you getting stopped out the short but there still being a bear market).
There will be times where more aggressive futures trades can be taken that can have 20, 30 and 50* pay offs but these will be higher risk. You'll have to use tight stop losses and might get stopped out before the market falls. This is very hard. To get 1:3 - 1:7 is much easier and is probably better for you to target, unless experienced.
3 - Leave that knife alone! When the bear market starts, accept we're in a bear market. Do not buy when there have been big rallies, good news or flashes of bullish optimism. You'll keep on buying into the highs of moves. These are known as "Sucker rallies".
If you want to increase your position when the market is cheaper than it is today, do it when the market is falling and do not buy when the market is rising. You'll get a far better dollar average. Although I'd say the best bet if big selling starts is just to wait, wait and wait. After a while, the crowd will be gone. Again.