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Navigating the Bear Market

3
19 Jun 2022 : 11:09
8 min read

Bear markets are frantic and frightening, but they are a natural part of the market cycle. Bull markets do not last forever, nor do bear markets. The latter are healthy and required for continued price appreciation.

Nobody can predict with certainty when they will begin, how long they will persist, or how drastically prices will drop. However, the market does leave clues. In this report we will discuss:

  • The clues given by the market near the top – shared in Cryptonary Pro
  • Survival tips for the bear market
  • What it takes to make it in crypto

Market Structure Beats Talent

Cryptonary Pro offers two main products:

  • Market Research: will always be bullish as the point of it is to find undervalued assets (or gems)
  • Market Analysis: shares an unbiased view on the market at any point in time and finds the clues left by the market

 

Bitcoin trended up to the meme level of $69,000 in November before starting to fall. Mid-month, the market structure turned from bullish to bearish with the setting of a lower low. The rest is history.

Were you paying attention anon?

Here are some screenshots taken from Cryptonary Pro’s Discord in the month of November after the structural breaks.

What else was leaving clues? The On-Chain movements from whales alongside the change in macro.

Our market analysis was spot-on. Anyone who reads it and conducts additional research could see that the overall picture is shifting towards the bearish side. While we cant advise every person on how to manage their portfolio, we can give a market outlook, and that’s what we always do at Cryptonary.

Survival Tips

Buy low, sell high. Investors buy during bear markets and sell during bull markets. Wealth is created this way.

While it sounds simple, very few do it. If they did, every investor would be a retired multi-millionaire by now. Let’s dive into more constructive tips.

  • Have an Income: Make sure you have a reliable source of income. The quickest way to wreck your life is to invest with all you own. Yes, crypto offers enormous profits, but that doesn’t mean you should take out a loan to buy the dip or quit your job to focus on it full-time (unless you want to build something) when you already don’t have enough money to pay your bills. Never invest in more than you can afford to lose. A stable income also grants you the luxury of waiting multiple years for crypto to thrive.
  • Knowledge is Power: Instead of buying a coin simply because your cousin encouraged you to, consider why you should, instead of following their advice. Start by learning and fully comprehending the fundamentals of cryptocurrencies & blockchain technology, then advance your knowledge by delving into more advanced topics. If you do your research and invest wisely, the market will reward you – you can never stop learning. You can start with Cryptonary’s Education (100% free).
  • Cash is King: Can’t buy the dip or distressed assets if you don’t have cash.
  • Risk Management: In a bull market, everything goes up in price, the same phenomenon happens in a bear market but with prices soaring downwards. Expect prices to go lower than you expect. Convinced this is the bottom? Avoid going all-in because you could be wrong and price could fall further. Also, exit when you are wrong and a certain support doesn’t hold.
  • Don’t Try to Buy the Bottom: You may think you know where it is, but it’ll likely fall further than you think. The reversal can also be incredibly boring (13-months in the 2015 bear), you have time. The only way we V-shape recover is if some out-of-this-earth news breaks such as the FED printing again. Don’t FOMO into every relief rally thinking the bottom is here and you missed out, but rather wait for signs of strength & reclaim of price. In every bear market, the bottom was formed when there was a long period of boredom and price accumulation in a range. Accumulation is your sign to start buying or DCA. The bear market will not end in just a day, it will take many months to recover.
  • Stay Away from Sh*tcoins: Avoid investing in projects with no fundamentals, even if they are hyped & marketed well. This gambling strategy may work in a bull market, still a game of musical chairs, but doesn’t work in a bear.
  • Build Conviction & Have Courage: Finally, have conviction in your investments. If you don’t have conviction, your emotions won’t be able to withstand the blood in the market, and you would end up either selling all of your holdings or leaving crypto for good. Having a conviction will develop with proper research and dedication. Don’t have a conviction for a sh*tcoin. There will always be buyers & sellers at specific prices – the market will not go to zero. So avoid FOMO and FUD, and do not rush with your judgments.

$1900 is a weekly support area for ETH, but it did not hold, and whoever bought at this price is already down 53%.

Make Money in a Bear Market

Look for other ways to make money, other than buying & selling assets. Some examples:

  • Run an Ethereum validator node. It costs 32 ETH and pays 0.12 ETH per month.
  • Look for token-less protocols, and try them out for airdrops, low risk/high reward. Try using apps on Arbitrum.
  • Farm stablecoins, and receive interest (1%-3% annually). Farm on Aave or Uniswap.

Market Cycles – Emotions

How every bull & bear market is formed.

Right now we are between Capitulation and Anger. Depression is still way off. Everyone will stop talking about crypto during the Depression phase, which is the most dreadful and boring time and when many people will leave the space for good. A prudent investor will remain in the Depression phase and begin to build up before the Disbelief phase.

Crypto is a Long-Term Game

Bear markets are no reason to panic. It is a period to generate wealth. The amount of funding, institutional interest, and liquidity is increasing every year. With regulations being enforced, crypto will be classified as an asset class. So whoever is telling you that crypto is going to zero, will end up buying the top like every cycle. People who stayed since 2013 lacked the basics and tools to learn, yet they persisted. Now that you have all the resources you need to stay in the game, will you choose to leave and regret it later, or stay and be ahead of the majority?

Highs & lows of every BTC cycle.

 

Summary | TLDR

  • Never fade market structure and pay close attention to it. It’ll also be the first clue on when the bear market ends.
  • Don’t try to catch knives or predict bottoms – it is a fool’s errand.
  • Have Patience, Conviction & Courage.
  • Maximise your time & capital in this bear market.

About Author

Yazan Naffa

More articles by this author

Yazan is a Finance and Investment Banking student in his final year at university. His understanding of financial markets led him to Crypto, and he has since become totally devoted to the space in 2021, having discovered his heart and passion. Base-Layers, DeFi, FA, and TA are his areas of expertise. Yazan is a big believer in Bitcoin & Ethereum.

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