Traders Explain 3 Ways of Surviving Crypto Bear Market – The Last One Might Shock You
The cryptocurrency market is down by 0.5% in the past 24 hours, with its total cap dipping to $891 billion overnight. This level represents a 2.3% rise in the last seven days, yet the market remains down by 15% in a month, by 31% in the past six months, and by 62.6% in a year.
There’s no escaping the fact that crypto remains in a bear market, with platforms such as Terra and FTX collapsing this year, and with trading volumes declining from over $300 billion per day in early 2021 to around $50 billion (and lower) in the latter half of 2022.
However, while bearish conditions mean that the chances of easy and big gains are significantly diminished, traders and analysts have increasingly been offering tips to their followers on how to survive the crypto bear market. From spreading risk/opportunity across a diversified portfolio to dollar-cost averaging, they decrease the chances of the average trader losing during the downturn, while also increasing their potential for upside when conditions improve.
Diversification
Diversification is applicable during bull and bear markets, so it’s always advisable for traders who want to spread their risk and potential rewards.
Of course, the interpretation of ‘diversification’ varies from one trader to another. For some, it means having a considerably wide spread of different cryptocurrencies (and other assets) in their portfolio, while for others, it means simply avoiding putting all their money in a single coin.
CNBC’s Ran Neuner recently gave an example of a portfolio worth $1,500, which was spread across 15 different cryptocurrencies. Including Bitcoin (BTC), Ethereum (ETH), and Arweave (AR), it operated on the principle of allocating more money to the fundamentally strongest coins, while also ensuring a good balance across the various sub-sectors of the cryptocurrency market.
Here is a $1500 portfolio.$BTC -$200$ETH -$200$SOL -$150$MATIC -$150$AR -$150$DOGE -$150$INJ -$100$RUNE -$50$STG – $50$GRT -$50$GMX – $50$HNT -$50$PYR -$50$IMX -$50$RNDR -$50
— Ran Neuner (@cryptomanran) November 27, 2022
It is balanced across sectors.These tokens should survive a bear & fly in a bull market.
While many investors may not wish to complicate things by having 15 separate trades on the go at the same time, the basic principle is sound. That’s because bear markets tend to hit some coins harder than others, making it difficult to judge which will emerge into an eventual bull market more strongly, and which may languish.
Dollar-Cost Averaging
One of the perennial questions which gets asked again and again during a bear market is, ‘Have we hit the bottom?‘ This is especially true of the 2022 crypto bear market, which upon falling to an apparent bottom, has fallen to yet another bottom, and so on.
The point here is that, especially during uncertain periods, traders can never really be sure when the market has hit bottom. Something similar applies to tops during bull markets, since, in the latter scenario, a collective sense of euphoria tends to make at least some traders believe that the good times will continue indefinitely.
Regardless of the market outlook, buy stocks on a regular basis.
— 𝕋𝕙𝕖 𝔻𝕖𝕗𝕖𝕟𝕤𝕚𝕧𝕖 𝕀𝕟𝕧𝕖𝕤𝕥𝕠𝕣 (@TD_Investor) November 29, 2022
Dollar-cost averaging, entails automatically buying more shares of a stock when the price is low and fewer shares when the price is high. The average purchase price is lower and the overall return is higher.
As such, the savvy, long-term investor should consider adopting a dollar-cost averaging strategy. What this involves is buying a small amount of a certain cryptocurrency (or several cryptocurrencies) over regular intervals, such as $100 of Bitcoin per month instead of $1200 all at once.
Doing this averages out falls and rises, meaning that traders can worry less about whether they’ve perfectly timed their entry into a market.
Presales
Presales may not be the first thing that comes to the average trader’s mind when they think of bear market strategies. However, as with the two tips above, allocating at least some money to a spread of promising presales can be a way of minimizing risk while maximizing potential upside.
And what’s interesting is that, even during 2022’s crypto bear market, some of the most notable presales have led to substantial gains following listings. For example, early investors in the Tamadoge (TAMA) sale from September saw the new altcoin rise by as much as 1,800% compared to its sale price in October, when it listed on OKX.
Of course, not every presale token is going to rise by this much when listing for the first time. Nonetheless, by carefully studying the current sales and considering the fundamentals (as well as the team) of each corresponding coin, investors can usually acquire a reliable sense of how successful a presale might be.
For the sake of example, here are three promising presales happening right now, with each coin involved boasting strong roadmaps.
Dash 2 Trade (D2T)
Dash 2 Trade is an Ethereum-based trading intelligence platform that provides real-time analytics and social trading data, helping investors of all experience levels make more informed trading decisions. It’s set to go live early next year, with its D2T token being used to pay for the monthly subscription fees on the platform.
Dash 2 Trade’s presale has already raised more than $7.7 million and is about to enter its 4th and final stage very soon. It has also announced listings on BitMart and LBANK Exchange for early next year, giving early investors a good opportunity to make some decent returns.
RobotEra (TARO)
RobotEra (TARO) is a Sandbox-style Metaverse that will enable gamers to play as robots and create its virtual world, including NFT-based land, buildings, and other in-game items. Due to launch in an alpha version in the first quarter of next year, it will also enable players to connect with other metaverses, in the process creating a multi-verse where NFTs from different platforms can interoperate.
1 TARO is currently selling for 0.020 USDT (it can be bought using either USDT or ETH), although this price will rise to $0.025 in the second stage of its presale.
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Calvaria (RIA)
Calvaria (RIA) is a game in which players can collect, trade, and battle with NFT-based cards. It will include various play-to-earn features, yet it will also enable users to play it without holding any cryptocurrency, something which could make it more popular than other blockchain-based titles.
RIA will be used within its ecosystem for purchasing in-game items and for staking, giving it a strong use case. The presale for the token has raised $2.1 million and is currently in its fifth stage, with 1 USDT buying 30.77 RIA.
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