$1.4 trillion is the amount that has been wiped out since the crypto market’s historic high in late November of 2021. Since then, the crypto market along with the equities market have entered into what investors are calling a bear season or a season with bearish qualities. This in essence means, that on technical analysis charts, the overall trend of cryptocurrencies is going downwards, meaning profits are low.
But not all bear seasons have to be a negative experience, and in fact, a bear season can turn an individual’s portfolios completely around. And this is due to the fact that during the bear season, prices are at all-time lows. And if the individual is well prepared with a proper war chest, then the next step in producing a positive effect from the bear season is to go shopping and purchase assets while they are low and as some analysts may call it, “discounted”.
With that being said, not all discounted tokens and coins should be purchased and there should be a good amount of prudence used during this bear season.
Sound Advice During A Bear Season
First thing is first, you must maintain your composure. One of the easiest ways to increase your losses is by acting out on your emotions. The most successful of investors, like Warren Buffet often tout that investing is an emotional activity and the most fortuitous of investors are those who temper their emotions.
Shorting the Market
Do not even think about it. This is the last time you should be thinking about shorting any specific project or protocol. This type of action will only encourage the bleeding and ultimate failure of a company.
Shorting is meant to be performed with due diligence and planning. Long before the bleeding occurs. Once the markets are already in downfall, shorting will only do more harm than good.
So keep those emotional triggers at bay and don’t act out.
Think Long Term
In 2017, Bitcoin infamously dropped to $3,200 before rebounding right back to over $20,000 simply a few days afterward. What does this mean? This indicates that the market ebbs and flows with current events, natural disasters (the pandemic), and even presidential elections (think El Salvador).
The biggest winner in this space will be and continue to be those who hold their assets in the long term. Even if you invested only a marginal amount a few years ago, now you would be up in nearly every major token or protocol.
Staking and Passive Income
Now is the time to be looking into passive income—with so many different platforms now offering staking rewards, this is the perfect time in the market to settle into a great platform.
Most major centralized exchanges now offer stake rewards for simply holding your token in a pool. Other platforms offer incentives like interest and high APYs to convince users to keep their assets in the platform.
Whether you choose to stake or simply hold your assets during this bear season, make sure to make prudent decisions with your mind, not your heart. This market is not for the faint of heart nor for the overly emotional—only a cool, calm and collected head will get ahead during this bear season.
Here is to wishing you a healthy and warm bear season.