Bitcoin (BTC), Ethereum (ETH), Shiba Inu (SHIB) and other altcoins are dominated by bears and bear markets are not anyone’s favorite time of the season. “But these things happen,” said crypto analyst Camille Lemmens, saying that traders make the most money in bear markets and explains how this is possible. We have prepared the analyst’s posts in his own words for our readers.
“Traders make the most money in bear markets”
There is no doubt that we are in a bear market for BTC, SHIB and altcoins. Bitcoin fell more than 50% from the ATH level, most altcoins like SHIB lost close to 90% from the ATH level and the LUNA event occurred. So what to do now? First, stop being afraid, and second, listen to one of Warren Buffet’s top investment advice.
Contrary to popular belief, traders make the most money in BTC, SHIB and altcoin bear markets. This is surprising, isn’t it? And this works the same in Traditional Finance and crypto markets. However, this is just one of the bear market trading tactics.
3 more time-tested strategies will not only help you survive the bear market, but can also provide a very strong foundation for you to bounce back stronger and become a bear market millionaire. Let’s get to the subject.
How to set up the crypto portfolio?
It is important to create the right portfolio. This is the foundation on which all traders build. This is critical because you laid the foundation for the next bull market. Now is the time to lay a solid foundation. Therefore, when the next bull market comes, there will be new ATHs. But keep in mind that some projects will not survive a bear market.
Here you can see a picture of a few sample portfolios. We did three different samples, from low to high risk.
- Low risk—40% on stablecoins like USDC/DAI. The rest is in blue chips. 45% hodl in BTC and ETH. SOL, ADA and AVAX 5% each.
- Medium-risk—like a low-risk portfolio, but with 3 medium-risk tokens added. FTM, RUN and MATIC. Percentages also changed a bit.
- High-risk—This is like a medium-risk portfolio, but we’ve added two high-risk tokens: Star Atlas (ATLAS) and Immutable (IMX). Once again, the percentages have changed a bit.
Now, this may not have your preferred projects. But don’t worry, you can create your portfolio as you wish. The important thing now is to position yourself correctly. Therefore, keep in mind that small-cap cryptocurrencies are risky in a bear market. There’s a chance they won’t survive. Therefore, blue-chip cryptocurrencies are now a safer bet as they have better finances. Also, they likely have more adoption.
It’s also important to stay on top of your portfolio. Manage and adjust wherever and whenever needed. In other words, swap coins or tokens whenever you think market conditions warrant it. You need to play this proactively. Sitting back and resting during a bear market is not the way forward.
BTC, SHIB and altcoins strategies to survive in bear market
1) There must be stablecoins for recovery
First choice stablecoin’ to look at. Despite the continuation of the LUNA story, which you have been following on the news of Kriptokoin.com, this is still a good move. The bear market is the time to invest in stablecoins. Even as much as 50% of your portfolio. Yes, we know, it’s not the most exciting option. But, as they say, stable and that’s what you need in this case. You don’t want or need another 70% to 80% loss. So, how about making some profit from your stablecoins instead? Let me show you how you can make a profit in a stablecoin.
Before you find yourself in a bear market, remember to make a profit. Let’s say you double your investment, subtract the original investment. Everything you leave behind is now at 100% profit. You can put your original investment into stablecoins for 50%. The other 50% go hodl with blue-chip cryptocurrencies like Bitcoin or Ethereum.
Farming is a great way to generate passive income from stablecoins. Some farms offer 35% to 40%. Convert some of your profits from your yield farming into stablecoins. First, you earn more tokens when the price drops. When the price goes up again, you have double wins. You have accumulated more tokens and now you get a higher price. But remember, stablecoins are not entirely risk-free.
2) Can dip be purchased?
This is the most heard advice: “Buy the bottom!” However, when and where does the decline stop? This is a very important question, isn’t it? To tell the truth, there is no crystal ball that allows anyone to know the future.
Drops can be like a falling knife and you don’t want to catch it. In other words, you never know when you’ve reached the bottom. Another thing to consider is that not everyone has infinitely deep pockets. There may be a drop at one stage, but two dips ago you’re out of money.
Here is a nice option for you; DCA or dollar cost average. Instead of entering with a large pile of money on a given day, spread that amount over several weeks or months. This way you spread your risk. You regularly add money to your portfolio regardless of the current price of that asset. You can follow a similar trading strategy while making a profit.
3) Must have non-crypto active or passive income stream
Our third option to help you survive in a bear market is to have a non-crypto passive or active income. Yes, having a passive income stream outside of crypto is a good and smart thing to do. Look to have more income sources. In other words, broaden the mindset and horizons of your investors.
Therefore, distribute your investments across different sectors. You need to advance in your current position. You can also ask for a higher salary or change careers. Or you can cut your spending.
4) Deep DeFi diveable
Our fourth and final option is to take a deep dive into DeFi. During a bear market, you have to put your mind to hard work. You have to arrange everything in such a way that once the bull market starts you can take your profit. This is the time when you can relax.
For now, it’s important to stay up to date on DeFi. To be honest, this is not always an easy task. However, once you put in the time and effort and understand this, the rewards are well worth the time spent. Also, new DeFi strategies will likely be even more complex. Therefore, it is very important to work on your basics now.
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