Crypto has never looked more desolate. The Bank of America (those TradFi guys…) may disagree with claims of a crypto winter, but just take a look at your portfolio. You may be in the red and contemplating your life choices, and we could only be at the beginning. What now?
1. Survival first
Take a good look at your finances. If crypto is one main source of income for you, prepare for your earnings to lessen. Evaluate your spending in other areas. Are there monthly charges like subscriptions you can cancel? Can you make swaps for cheaper alternatives? Lower your expenses to prepare for rainy days ahead.
If your living expenses are at risk, consider even walking away from crypto until you are financially able.
2. Adjust your investing strategy
Rebalance your crypto portfolio - this should be done periodically whether bull or bear. Determine your goals, positions and investment horizon in a bear market and commit to them. Sell or buy assets to keep to your desired level of risk or asset allocation.
Reflect on your investing style. You could even take notes or journal. Write down what helped you earn profits vs. what made you suffer losses. Take the good habits with you to the next bull market.
3. Always take profit
Bull or bear, taking profit should be mandatory. It’s easy to get greedy and hope to earn just that bit more, but being disciplined will save you from unexpected losses or overnight crashes like what happened to LUNA and UST.
4. “Buy the dip”
Bear markets are good times to research on projects and slowly accumulate crypto that you believe in. For example, you can dollar cost average into bitcoin and ether by investing a fixed amount of money into them at regular monthly intervals.
Bonus: Bitcoin and ether currently lead the crypto market. Once the bull run arrives, they will be the first to pump.
5. Low-risk, stress-free
If you’re already spooked, save yourself the stress and stick to the blue-chips (refer to point 4). You could have a sizable amount once the bear market ends.
Many traders also like staking or lending their crypto in reliable DeFi protocols to earn passive income.
6. Hedge with futures
If and when you get more comfortable, crypto futures could be an option to hedge against volatile price action. For example, rather than selling your bitcoin, you could short bitcoin perpetual futures on a platform like ApolloX to offset the loss to your holding.
As for leverage, this goes without saying that you should trade based on your risk appetite and funds you have. If you want to be as low-risk as possible, trade with little to no leverage. If you have money to spare, you could adjust leverage accordingly.
But always do your due diligence and read up! Make use of platform resources like ApolloX’s Help Centre, which provides FAQs and tutorials on futures trading.
7. NFTs are high-risk investments
NFTs may be all the rage and easy to buy, but they don’t guarantee returns on your investment. In fact, for the general trader, we could venture to say that it’s tougher flipping NFTs as compared to letting your crypto earn yield in a DeFi protocol.
The average person isn’t able to sustain NFT trading when one jpeg could cost a few hundred dollars, excluding gas fees - especially in a bear market. NFTs are highly illiquid and you might want to consider this a higher risk investment. Do not invest amounts you cannot bear to lose.
8. Stay plugged in
Heard the saying ‘Fortunes are made in the bear market’? Stay interested and take this time to explore projects with potential. You may just chance upon a crypto gem and get in early enough. Again, remember to take profit if so!
For projects that are currently in their early stages, if they survive, they may come out of the bear market with a strong product, real momentum and growing user adoption.
9. There’s more to life than crypto
Crypto is exciting and there is money to be made, but don’t spend your days looking at charts. Invest in real-life relationships and hobbies. The people around you will be your support through bad times, and having interests outside of crypto will help you to enjoy life more.
10. Develop new knowledge and skills
Don’t wallow and waste the bear market away. Take the time to brush up on your crypto knowledge, or learn a new skill like programming. Especially for the latter, as crypto and blockchain grow, Web3 developers will be (and are already) in demand.
11. You can’t predict the market
Accept that you have no idea how the market will move tomorrow, in the next month or the next year. You can do all the technical analyses you want, but macroeconomic factors, human emotions and random events can catch you unawares.
Above all, take the time to consolidate your gains and losses, prepare for the next bull market and enjoy the ride. WAGMI!
The views expressed in this article are the author's alone and do not necessarily represent the views of ApolloX.
Risk Reminder: Crypto and NFT trading carries a risk. All trading activities are done at your discretion and at your own risk. The information here should not be regarded as financial or investment advice from ApolloX. ApolloX will not be liable for any loss that might arise from your use of any financial product.
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