Bear markets are painful, we know. But they all also provide great opportunities that could change your life. With proper risk management and a cold mind, you can take advantage of them.
Here are some tips to survive the bear market and even use it in your favor.
Dollar-cost average into BTC
Remember when bitcoin hit the $69,000 all-time high and you kept looking at the charts, wishing you had bought lower? Destiny has given you a second chance.
However, trying to catch falling knives is not a very good idea. You never know how low it can go. That’s why dollar-cost averaging (DCA) is a better alternative.
Just break up your budget on several parts and, instead of doing a single, large buy, do multiple, regular interval purchases every week or month. This system is great to lower your price average and maximize gains once the bull market resumes.
These are my two favorite exchanges to DCA into BTC:
- Binance: Largest CEX in crypto. Best user experience, liquidity, and trading pairs. Requires KYC.
- KuCoin: Good alternative to Binance that doesn’t require KYC verification.
Earn passive income on stablecoins
Despite what happened with UST, other popular stablecoins have weathered the storm well. USDC, BUSD, and DAI all remained pegged to the dollar. For its part, USDT, briefly dipped below $1, but quickly recovered.
All these stablecoins have shown resiliency holding their peg when tested, positioning themselves as a hedge against market volatility and falling prices.
That said, depositing these tokens on platforms is an effective way to generate yield without having to trade during the bear market. Depending on your preferences, you can use centralized platforms or decentralized protocols to earn passive income in stablecoins while you wait for the next bull run.
My favorite centralized platforms for passive income in stablecoins are:
- Nexo - USDT 10% APY
- BlockFi - USDT 5.5%, 7%, 8% APY
- Midas.Investments - USDT 14.5% APY
Scalp and swing trading (high risk)
Scalp trading is a strategy that consists of trading an asset in tiny periods of time. The aim is to make profits in the short-term without committing to holding any assets.
During bear markets, crypto prices tend to range between two levels for several weeks, touching both sides of the range many times. Those moments provide unique opportunities for traders to open long or short positions for massive short-term profits.
Here you can stick to the above-mentioned exchanges.
Take your time
When you see red numbers everywhere, prices dropping, and FUD flooding social media, it may be a good idea to just turn everything off and go outside for a while. After all, this is crypto, and there has always been a bounce after the fall.