The Bitcoin bear market has been here for months! After most analysts in November 2021 were still betting on gains to $100,000 at the turn of the year, the Bitcoin price started to fall rapidly. But what to do in the Bitcoin bear market? In this article, you will learn what you can do to survive the possibly long Bitcoin bear market and even make a profit. After reading our guide, you’ll feel more relaxed about the next few weeks and could be in perfect shape for the next bull market. Let’s take a look at it in more detail.
What is a Bitcoin Bear Market?
A bear market represents a period in the monetary markets when prices are displaying a downward trend for a long period. Investors have little faith in the market and tend to sell rather than buy a certain financial asset. Basically, the bear market is illustrated by a pessimistic attitude of investors towards the market and dropping prices.
The bull and bear symbols have been typically utilized to define movements in financial markets for decades. Bitcoin is not spared from these consequences. Historically, Bitcoin’s price has been pushed by bull markets and bear markets. The whole cryptocurrency market observed the development of the Bitcoin price again and again. Other altcoins such as Ethereum, Cardano, XRP, or Solana also drop when the Bitcoin price drops.
How long does a bear market last?
Not every price drop over a certain period is a Bitcoin bear market. Major corrections can happen within a bull market. This was the case, for instance, in spring 2021, when the Bitcoin price dropped sharply after months of huge price gains, but after a few months price gains and all-time highs were registered again.
However, if the downward trend in the Bitcoin price continues for several months and there is no substantial upward movement for several weeks, one can say that the Bitcoin bear market is happening. So far, Bitcoin’s past bear markets have been illustrated by a around 80% drop in Bitcoin’s price from its all-time high. This was the case in the major bear markets of 2014 and 2018.
In the past, we have witnessed numerous Bitcoin cycles that have contained bull and bear markets. These were always founded on the Bitcoin Halvings. In this, the rewards for bitcoin mining are halved. So far, the markets have been established on a 4-year cycle. The earlier major bear markets started in 2014 and 2018. At the last turn of the year, the Bitcoin price touched all-time highs.
What to do in a bear market to avoid losing money?
In a Bitcoin bear market, not only the prices of Bitcoin but also the prices of almost all other cryptocurrencies drop. This means that your whole portfolio is very likely to make losses. You have to accept this fact in a bear market.
You should consider the following factors in this context:
- The number of your cryptocurrencies, including bitcoin, remains constant. They only depreciate compared to FIAT currencies like the Euro. Yet, this value can increase again.
- A renewed bull market is almost guaranteed in the future. Bitcoin in particular is deflationary in its structure. Bitcoin halvings raise the difficulty of producing bitcoins exponentially in the future.
- Over the long term, cryptocurrencies are worth more in a bear market than they have been in a past bear market but are very likely worth less than in the next bear market.
However, it is likely that the value will rise in the next bull market and that you will consequently make profits with your stored cryptocurrencies. So follow the rule:
“Never sell your stored Bitcoins in a Bitcoin bear market if you want to invest for the long term!”
Furthermore, a Bitcoin bear market is always an incredible opportunity to buy more Bitcoin and other cryptocurrencies to make profits in the future.
What rules should you follow?
- No Emotional Shortcuts: Try to stay Rational in a Bitcoin Bear Market! Don’t let dropping prices panic you and you must rather wait for a little more! Patience is the key.
- Be greedy when others are afraid: If the majority doubts the market and sells their bitcoins, you should consider purchasing the bitcoin for a low price to make long-term profits!
- Preparing for the next bull market: The Bitcoin bear market is an amazing opportunity to deal with issues such as Bitcoin wallets, price analysis, and new projects. Enlighten yourself on these topics to make better judgments in the next bull market!
How can you alternatively make money in the Bitcoin bear market?
In the Bitcoin bear market, it is quite difficult to make money in the short and medium term with increasing prices. As such, you need other strategies to make money in the bear market. This includes:
- Trading Bitcoin financial products such as ETFs or futures
- Staking other cryptocurrencies
- Bitcoin or Ethereum mining
- Investing in new projects that could also grow in the bear market etc.
Try to find new options to make money even in the bear market. A bear market can last for months or even years, and you have to adjust to the changing events.
Should you buy during a bear market?
If you want to earn long-term returns with Bitcoin, an investment in Bitcoin or any other altcoins in the bear market is extremely profitable. A revived bull market in the future is almost inevitable. Just think long-term and don’t let short-term losses worry you!