The bear markets truly serve as double-edged swords!
The opportunities offered by the bear market are immense and highly significant, which often result in high profits in the future, provided that the investments are made with precision. A bear market can also be an absolute risk for your portfolio. Therefore to protect your portfolio from the harm of the ongoing bearish sentiment, cryptoprnr is here with a video made especially to address this issue and ensure profitable investing! So watch this video till the end to ensure that you don’t commit these mistakes and prove to be a wise crypto investor!
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Now without further ado, let's get straight to the point.
But before that, a quick disclaimer, this video is meant for only educational and informative purposes; this should not be considered financial advice. Crypto investments are made at one’s own risk.
Before we explain the risks, let's discuss what a bear market is.
In the crypto world, a bear market is a market situation when the crypto market experiences prolonged price declines in various or all assets. Pessimistic investor sentiment is a typical feature of bearish markets. It usually involves a 20 % or more drop in the price value of the cryptocurrencies. The last bearish market was observed in 2018, and most of the crypto investors managed to survive, but here we are in the same situation again! Will investors be able to survive this bearish market? Let us know your thoughts in the comments section below!
Having discussed the definition, here are the risks you should avoid to survive the bear market!
- Buying the dip
One of the influential market forces is momentum, and the investor sentiment is tough to turn around.
It is not necessary that the price considered to be the lowest by you would be the lowest. The prices may continue to drop even further, and you will eventually lose value. This may induce conditions of falling knives or a whipsaw! If the value of the cryptocurrency is constantly falling and the downturn is not mitigated, then perhaps the possibility of the scenario being reserved and the bullish phase striking back is relatively low! This is when people get fooled by the dead cat bounce pattern! Make sure not to commit this mistake!
Even the ongoing bitcoin scenario is deemed to fall under this category. Most crypto investors and enthusiasts consider the value of bitcoin crossing $30k a part of the dead cat bounce pattern! So cryptopreneurs! Beware of it!
- Bull market pricing
Another mistake that most crypto investors commit is indulging in trading with the bullish prices in mind acquired from the previously noted bullish phases. People tend to have perceptions determined by bull markets wherein the altcoins traded at all-time highs and were somewhere overpriced. We need to understand that crypto is highly speculative, and those phases' values can not consistently be replicated. Having bullish sentiments in mind in a bearish phase further results in unrealistic expectations, which is the next mistake on the list!
- Unrealistic expectations
Crypto investors and the new entrants in the crypto space usually have unrealistic and extremely high expectations from the cryptocurrency they invest in. Suppose a return as high as 1000x is expected initially. That will lead to consequences such as overtrading, bad budgeting and all money invested in a single altcoin compromising on other cryptocurrencies where gain could be made.
Moreover, it can be mentally traumatic when a cryptocurrency is expected to give bullish returns in a bearish market, and such expectations are not realized.
Therefore our advice to you all shall follow the fundamental principle of investing. Any guesses? Well, right! Invest and forget!
Moving on to the next mistake, please take a minute to share this video among all the crypto enthusiasts so that they can earn high returns, too and don’t fall prey to these common mistakes!
- Being too heavy in alts
After witnessing considerable losses in Bitcoin, many crypto investors tend to withdraw all their investments and invest in the altcoins. Here, the mistake of forgetting the principle of a high-risk high return is made.
The bearish markets provide the best opportunities for the blue-chip assets to roc and shine, and the crypto community shall be mindful of that! As revealed by the data, charts and graphs, if compared to bitcoin, most altcoins have been relatively lower in terms of growth.
As a matter of fact, in a bear market, all the top altcoins tend to underperform the bitcoin benchmark.
- Past performance
When the previous phases of bearish markets were observed, the crypto crashes were caused by the events specific to the cryptocurrency space, and the macroeconomic environment was stable. But now, the scenario has been reversed. As we all know, inflation is soaring high right now; with FED passing new regulations, it is anticipated that there shall be a stark decline in global growth accompanied by sustained global recession and stagflation. The crypto world had not witnessed such events yet, as the last time when the global economy faced recession was in 2008, back when Bitcoin was not even introduced.
- Price predictions
This is one of the most common mistakes made. Crypto investors tend to follow a single prediction sometimes religiously, and if proven wrong, that shall lead to massive losses! Even though the analysis tools are used to make predictions, and most of the predictions made are precise, many predictors and the predictions made by them were invalidated in this bearish market. This is so because all the key technical analysis outcomes are mere guesses.
Therefore, it is always advised to opt for a broad source of resources to gain wider perceptions and distinct viewpoints. And do you know what the best way to do that is? DYOR! Do your own research!
- Bearish sentiment in NFT marketspaces
This is one of the most ignored mistakes that are likely to be committed. Interestingly, despite the immense dropdown in crypto, NFT sare continuing to dominate and ace. But will the bearish crypto market hit the NFT market space too? Comment down your thoughts in the comment section below
Well, while we have had bear markets in the crypto space before but we
haven't observed the same in the NFT space.
During the last bear market, NFTts were relatively unknown. Even in 2018, when we entered the bear market, Opensea was just launched. So the NFT bear is just unexplored yet because trading volumes in the nft market have not fallen as much as those in the crypto space. But this doesn't imply that the prices can’t fall or won’t fall. It is undoubtedly tough to draw parallels
between the length and depth of any NFT bear market in comparison to a bear market for crypto in general. Furthermore, the bear markets tend to drain liquidity. The impact of less liquidity is likely to be greater
for NTFs as it comprises rare, unique and exotic art and finding buyers for the same is a bit tough in bearish market sentiment.
- Giving up
Well, here comes the last mistake on our list! Not just in the crypto world, this mistake should not be committed in life too!
Investors tend to give up when they are on the verge of acquiring significant gains! The bearish market is the phase that is undoubtedly the toughest of all to survive and do justice to. Therefore, many crypto investors give up during this period. The bear market renders the most promising avenues, and with the advent of Defi, this point becomes even more significant.
So here is our list of the mistakes you should not commit in the ongoing bearish market!
We hope we were able to provide some value and helped you to move a step ahead in your crypto journey. Be sure to check out our Crypto Brand called Cryptopreneur, get yourself the highest quality Crypto Merch available right now on the market, and make sure to subscribe so that you don't miss out on any of our content. Till next time, Goodbye.