There is little to do, sooner or later the bear-market will begin. With this observation I would simply like to point out that the price of assets such as Bitcoin cannot continue to increase indefinitely: it will reverse its structure and begin to fall. This is something that has already happened (see 2018) and will happen again. Obviously, we all hope that the descent begins as late as possible, however for that moment you have to be prepared.
How can you be prepared for beginning of the bear-market?
There are some small strategies you can use to make money even during a bear-market. First of all, it must be pointed out that in order to face it with due serenity, you must never invest more than you are willing to lose the next day. Furthermore, you should only invest in assets that you are convinced of and that have excellent fundamentals. That said, it is necessary to define what kind of approach we have towards cryptocurrencies: do you want to be a trader or an investor? This decision is very important and totally changes the strategy to be adopted.
Investor: The investor is the one who doesn't care if the market goes up or down. Usually, in fact, investors buy assets with an accumulation plan, thus investing a certain amount of fiat money on a regular basis. If this type of approach is adopted, then, the bear-market is almost better than the bull-market, because it allows you to accumulate greater amounts of cryptocurrency for the same investment. It should be noted that the investor believes in the fundamentals of the asset he buys and is therefore aware that sooner or later the market cycle will reverse again and his investment will start growing again.
Trader: The trader is the one who buys a certain amount of cryptocurrency at a low price and resells it when it rises, earning the difference. This work can be done assuming that the market is positive, but when prices are falling, traders usually rely on derivative products such as futures. These services offered by exchanges like Binance allow you to short sell an asset and buy it back when it is lower in price, earning the difference. In this way the trader perceives a gain even when the market falls. But be careful, this type of operation requires a lot of experience and knowledge of the economy, anyone who has recently entered the world of cryptocurrencies is better if they use the first type of approach.
In conclusion, it is important to reiterate that once you have chosen the strategy you want to adopt for your investment, it must be respected. You should never improvise as a trader otherwise you will incur capital losses due to inexperience. Furthermore, the bear market must be faced with a firm mind and leaving emotions aside. If you fail to do so, you probably need to reread the premise I made.
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