The crypto market isn’t all rosy. Just like any market, it also has its highs and lows. This can be very precarious, and as a crypto trader, investor or enthusiast, have to be prepared for whatever the market brings your way. You can’t expect to buy Bitcoin and always make a profit. There are times the market would go south and if you’re not prepared for this phase, you could end up losing some or all your funds. It’s all part of the game.
One major reason people purchase BTC or any other cryptocurrency is to make profits either instantly or in the long run. This is usually easy to accomplish during the bull run when the market is all green. However, the market cannot always remain bullish, it has to retrace and sometimes turn bearish. Every crypto trader dreads the bearish season, but experienced traders know how to make profits even when the market is red.
In this article, we will be explaining the bear market, and how to see it as an opportunity to make money.
You can check out the 2021 review of the best crypto exchanges to buy BTC in Nigeria.
What is a bear market?
Knowing what a bear market is and its implication is the very first step to knowing how to trade in a bear market. The bear market is the opposite of the bull market, it is gotten from the animal bear, and the way it swipes its paws downward while attacking. In a simple term, a bear market simply means ‘a falling market’. It is a period when a market experiences prolonged price declines.
However, the bear period is definitely one of the best periods to purchase BTC and other cryptocurrencies. It is a period you should always anticipate if you want to succeed in the crypto space. It provides an opportunity for you to purchase Bitcoin and other altcoins at a cheaper price and also allows you to easily and quickly recover your losses when the price finally rises again.
How to trade Bitcoin in a bear market
Making money in a bear market requires lots of technicalities, analysis, knowledge, and a good foresight of the market. Almost anybody can get BTC on any P2P Platform in a bull market and make a profit. The real test is how you can do the same thing and make profits in a bear market. The truth is, the trend of Bitcoin doesn’t have to go up for you to make money it just has to move.
So, how do you go about this?
Create an account
First, you need to create an account on any P2P platform of your choice or exchanges that allow you to trade Bitcoin and other altcoins. After you’ve created an account and verified it, conduct adequate research on the market.
Research and brush up on your TA
Do your research on the market. It might be small enough or extensive, just make sure you are satisfied to some extent with your research. Study the market trend and the price rate to improve your knowledge of technical analysis.
You definitely do not want to place a trade without doing proper technical analysis, it will only look like you are gambling with your money. Play around with the indicators – start with basics such as Moving Average (MA).
Test out leverage trading
After you’ve conducted your analysis, you can consider margins or leverage trading. This type of trading can make you earn massive profits even from small price movements. Dial-up the leverage to 10x, 50x or even 100x if you are confident about your technical analysis. Margin trading presents huge rewards based on expectations. On the other hand, you should know that if your margin trading goes south, the penalty is complete liquidation, so there’s no room for error.
Trade other gems asides BTC
Lots of cryptocurrencies are very cheap in the bear market, so you don’t need to rush into a trade. Conduct extensive research and enter a trade that has the potentials to give you 10x of your leverage.
Take your profits
This is an aspect you should be happy to do and also do as fast as possible. It is one of the most important parts of trading. If you fail to do so, you might end up losing your profits.
Why you should buy BTC in a bear market
Generally, all crypto traders look to buy at a lower price and sell at a higher price which is always very common in crypto due to its volatility. A bearish market presents a clear opportunity of buying into the market at a reduced price and taking your profit when it rises back. It is safe to note that a bear market can go further bearish.
The main reason you should buy Bitcoin in a bear market is that the price of Bitcoin and other altcoins will be astonishingly low compared to the bull period thus providing an opportunity to those who have been waiting for the right time to buy.
Another reason you should buy in a bear market is that it provides an avenue to recover all lost funds. You do so by “buying the dip” as it is popularly called by “Bitcoiners”. Buying the dip means buying more of a coin at a low price instead of selling. The reason behind this is that you make more profit as soon as the coin retraces its movement and rises again.
In conclusion, we have explained what a bear market is, the psychology behind it, and its implication. We have given few steps on how to make money in a declining market. You can buy and sell bitcoin or altcoins in several exchanges and P2P exchanges like Remitano.