How to make a profit in a bear market

Making a profit in a bear market is tricky, but if you stick around and play it right in a bear market, you can actually pull it off.

author avatar
Jay Crypto


Last updated Jul 27, 2022 at 6:59 PM

Posted Jul 22, 2022 at 1:00 PM

article image

If you understand how to do it, bear markets are the best time to build your portfolio net worth and teach yourself many things, of which patience is one. Some people find it hard to save their portfolio. This article will focus on making money in a bear market.

Make a profit in a bear market

Crypto grew more in the bear market than in the bull run. Where bullish trends encouraged many new people to enter the crypto world, bearish markets gave the crypto sphere the most educated faces and some of the top coins and tokens. $SOL, $AXS, $LUNA, $SAND, and $MATIC are just a few cryptos that returned over 150x from 2020 to 2021. These all were launched during bearish markets.

article image

The point is: that you have to have the patience to endure the market. There are cycles when the price keeps rising and falling in almost every timeframe. Take any coin, stock, or commodity – the price never moves in one direction. If you understand the cycle of the timeframe you are trading in, half the battle is won. You simply enter the market when it is bleeding and everyone is in fear, and you exit the market when everyone else is getting greedy and buying the top.

If your portfolio does include stable coins, make sure those are safe ones like USDC or USDT. If you don’t own stable coins in your portfolio, you must divide your holdings into at least four protocols and then stake those on trusted platforms.

As they say, “never dig when you are already in a hole” – exit the market at the first sign of danger. Yes, panic selling is different but imagine holding onto LUNA in the hope that it will recover.

Analyzing the next sector to pump is like discovering a fortune. A close friend of mine invested in GameFi and NFTs in 2020 and he was paid off pretty well. Observe the trend closely  and follow it to remain in a better position when the time comes. Some potential sectors to invest in could be the following:

  1. Layer 1 and layer solutions
  2. NFTs
  3. GameFi & play to earn/learn/watch/move to earn
  4. Launchpads

Understand the risk involved and ask yourself how much loss can you endure. If you want to play it safe, keep most of the portfolio in layer1 top coins like Ethereum and Solana. Even though your ROI will be lower, your investment will be exposed to less danger. However, if you consider yourself ‘Point Break’ and want to face whatever happens, you can dive into the newer projects. These projects will either make you rich by giving 1000x or rekt your whole portfolio.

article image

Talking about market cycles, again, even in a bear market, the price never drops steeply. There are pullbacks and reversals. Learn to benefit from these small market movements and try to hedge your positions. 

For example, I recently observed that ThorChain Rune was very volatile. It was rising even 10% if Bitcoin was just 3-4% up. When Bitcoin dropped back to the support level, RUNE would drop at the same pace it grew. So I decided to buy low and sell high but I never exited the market since I was bullish on Rune. I bought a low 30% more than I wanted to keep and would sell that 30% to 40% when it was nearing resistance. That way I held my position:  I not only brought my overall entry point but made a profit out of it.

Never rush to buy in a bear market. Imagine buying Bitcoin at $40,000 after it has dropped from $69,000 with everything you have and it drops below $20,000. It’s better to buy in parts and always have something in your hand to buy the next dip. 

If you follow these strategies, you’ll be at an advantage compared to those who panic sell or end up at a loss. This blog is an editorial opinion and not financial advice. Trade Safely!

Share on

  • Copy link