6 ways to profit in a crypto bear market
The bear market can be downright brutal. Traditionally, a bear market is defined as a period of negative returns. But it provides some incredible opportunities to make profits if the only one knew how to make use of them. The market is ruled by the assumption of waiting out until the times get better but bear markets can make people a lot of money.
Even when the market is underground, there are plenty of ways to make a profit. Cryptocurrencies do not need to move up for you to profit. You need to put in time and attention and all that needs to be done is a trend—irrespective of direction—identified. If the movement happens in a shorter time frame, the risk for getting liquidated is high but the money comes quickly.
If you’re concentrating on Bitcoin, one thing you would like to do is to keep an eye on the trading of the other altcoins, because more often than not, Bitcoin aligns itself with the architecture of the other market.
Try a hand at Margin Trading
That would be your beginning point in a bear market. While it may sound a little insane, margin trading can bring in huge rewards. A proof is the 7000 BTC that was earned by two top traders of Bitmex on margin trading.
But it is important to remember that that may as well be an exception. Traditionally, margin trading would allow you to keep the coins even after if at all, the value drops. And in case you fail to use the leverage, you’d end up paying for that failure in liquidation.
Technically Analyse the market
The bear market gives you plenty of time to brush up on your technical analysis. You cannot possibly consider, or go for, a margin trading without being aware of what it is and what it might turn into. The trick lies in beginning with the basics and then moving on to the more complicated stuff.
A great tool to experiment is Bitmex’s test net.
The bear market will give you time but it will not give me so much time as to become a pro at Technical analysis which is why just mastering the basics is enough. Once you have a good grip on the rudiments, you can confidently pick up on your entry and exit and you will have a better chance of selling near the top when the market turns green.
Look for the Hidden Treasure
You can use the slow movements of the bear market to research the undermined, underestimated assets and read on the potential that they can have. The aspects will have low volume and low rates thanks to the bear market which will take the pressure of acting fast off of you.
This is where you need to have patience as a trader. Most traders would give up which is exactly where you can make your profit. When it comes to cryptos, the important thing is to be patient while a certain project is in development. The trick lies in constantly checking their social feeds and researching on the Github depositories as much as possible.
Climb your way for Profit
In the low market, you can revel in the profits that come from small price movements. That is to say with free time and lots of research and grinding, you can make profits off the minimal movements that happen in the bear market.
But this comes with its drawbacks too. So you need to be careful and keep an eye everywhere.
Become an ICO Detective
Forget about the ICOs whose crowdsale is ending in the next 5 days and shift to your focus to the ones that are still months away. Study the ICOs carefully and identify the bear trap in the market. Read their technical papers, analyse their movements, and this will help you spot a winner long before the public has hopped on.
Get a Crypto Job
That’s right. If your crypto trading isn’t supporting you anymore, you can get a job in crypto. Multiple companies are still hiring because they know that the bear market is only temporary.
One aspect that might make the idea of working in crypto interesting is the possibility of getting paid in crypto.
Those are some strategies you can use to earn some bucks while the bear does the walk. However, if you do not fancy researching or reading about multiple cryptos, you can try shorting (i.e. short selling the coin and hoping for the price to increase), swing trading (making money of the micro trends; best for people with high risk tolerance), and passive income coins (just holding on to the coins generating a passive income irrespective of the market activity; works best for people with low risk tolerance).
Must Read 6 Lesser known Trading Tips for Altcoins
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.