Sharing my BTC strategy for bear and consolidating markets

[Superalgos]

As I write, BTC is suffering the worst fall of 2019.

I'm a hodler, so I'm suffering a bit. But not too much, as I'm also trading actively and making more BTC as price falls. It's simple, you sell a part of your holding when bitcoin starts falling and re-buy at a lower price, getting more bitcoin without putting any more cash!

A bunch of friends and I are maintaining this open-source strategy that just made 26.85% ROI in BTC in this single fall.

The strategy is explained in this article recently published in Hackernoon: How to Increase your Bitcoin Holdings in a Bear Market. You can use it for free...it's open-source and we improve it every once in a while (you can help improving it too!).

Take a look at the trade we closed today. It started with the brake down of the Bollinger bands in the hourly chart on Sep 6th, taking position at USD 10,371. We took profit moments ago at 8,127. That means we bought 26.85% more BTC than what we started with. Here is the visual of the trade:



Current Performance in Backtests (Poloniex)

Year:	2019	2018
Trades:	9	19
Hits:	8	12
Fails:	1	7
ROI*:	106%	549%

[1714861704]

1714861704

[1714861704]

1714861704

[1714861704]

1714861704

[Superalgos]

A quick line to let everyone know that the strategy that produced this trade last week has been open sourced by its maintainers. You may find the strategy and use it for free in this Github repository: https://github.com/Superalgos/Strategy-BTC-WeakHandsBuster

Take a look at the main trades from the first half of 2019:

[Superalgos]

Hi everyone... I just wanted to share with you a Hacker Noon article explaining this particular strategy: How to Increase your Bitcoin Holdings in a Bear Market - Part I

[jamesndungu1]

To be successful on the bear market you need to find good projects to purchase on a long term, profitable ones.

It’s also important to make long term trading options and hunt for dividends paying projects on the market.

You can also go short on bad projects. Bear markets might be tough for good projects, but for bad projects, they are brutal and that's where I make money.

[ChrisPop]

Bear market = make money by shorting bitcoin
bull market = make money by longing bitcoin

It is as simple as that! Remember that we complicate trading because we think we need to know more about the market in order to make more.  But that's not true. Technical analysis is giving you an edge over the market, risk management limits your losses and emotional control makes you stick to your edge and risk management principles.

[Superalgos]

Bear market = make money by shorting bitcoin
bull market = make money by longing bitcoin

It is as simple as that! Remember that we complicate trading because we think we need to know more about the market in order to make more.  But that's not true. Technical analysis is giving you an edge over the market, risk management limits your losses and emotional control makes you stick to your edge and risk management principles.

Well... you nailed it. It is that simple.

The only issue is knowing when to do what. That is where a properly structured strategy comes in place.

[hugeblack]

To say "how to Increase your Bitcoin Holdings" is easy but implementing the strategy is not always perfect and does not mean that it will always make money because it is based on luck.
If you succeed in reading the charts and link them to events/news you may have a strong predictive intuition through which you can convert losses to gain, especially as the market fluctuates significantly during the month or year.
If you do not have enough plans, make a long-term investment and you will make enough profits.

[adroitful_one]

Nice Job! A lot of people don't realize that even during a bear market, there is still a lot of market fluctuation occurring that you can profit from. I actually took my free $5 I got from the Robinhood app and have been playing the downtrends in Bitcoin and already have it up over $30. All during this bear run that has been going on. Whatever you're doing is working, keep it up!

[Pearls Before Swine]

As I write, BTC is suffering the worst fall of 2019.

Worst fall I would not argue with, but bitcoin is still up a lot since being in the $3000 range.  I don't know what price you bought in at but I suspect you're still in the money.  Bitcoin isn't suffering quite as badly as you'd make it sound.

A bear market is the absolute best time to make money, but it takes patience and discipline and a belief that bitcoin is undervalued.  Now is an excellent time to buy and hodl.  However I would argue that we are not in a bear market by any means.  This is just a tiny correction we're seeing.  A bear market would suggest that there is an overall downward trend, but that isn't really what's happening in the market.

Well... you nailed it. It is that simple.

It would be silly to short bitcoin right now in my opinion, and I think there is money to be made via a buy and hold strategy.  Bet you in a month bitcoin will be back above $10,000 and this will all be a moot point.

[Theb]

ChrisPop is right even without pming you for anyone that is interested the only real way to increase your position without adding more capital is by shorting Bitcoin or for any cryptocurrency in that matter. Of course it's easier said than done since we don't know the how much and when we will short an asset or even if it will fall after we sell our holdings. That's why they key to any kind of shorting is to always know the resistances of the asset and when it will re-test it. If it fails to break out of it then you can sell but if it continues to go up after the resistance it's really up to your choice if you will still sell or hope that it will re-test another key resistance level. Having a plan is really what you need and not try to be greedy always as it may lead to losing all of your capital after.

[1Referee]

Bear market = make money by shorting bitcoin
bull market = make money by longing bitcoin

It is as simple as that!

Is it really that simple? On platforms such as Bitmex you have to pay close attention to the funding rates. In a bear market obviously, you'll have more shorts than longs, which means that your fee as shorter will significantly affect your position the longer it remains open. Vice versa for when there are more longs than shorts during a bull market.

Long term speaking it would make more sense to just stick to unloading spot if you expect the bear market to last a year. There is way less risk involved sticking to spot investing/trading.

With how popular leverage trading has become people have lost more money than ever before in this space. Some morons think using 50 or even 100x leverage is not risky at all. I haven't seen people be this stupid in all the years I have been trading/investing stocks/crypto. It's only a matter of time before we get the first 200x platform. As platform you got to 'innovate' eventually...... 

[Shinpako09]

There's nothing in my mind but to buy during bear market. That's the only way I know on how to increase your btc since it's really the time to buy, price is cheaper. You can also try to find other good projects or alternative coin to trade and used your earnings to buy btc. During bear market, most of not yet skillful traders lost because of panic. Earning in bear market is kinda hard that's why others are waiting for increase or just holding until they saw a good timing.

[d3nz]

Best way to earn bitcoin is to buy and sell of an atlcoins since the price of it are changing everyday same with bitcoin. And best way to analyze the price is 7days on the chart.

But some are buying and selling their bitcoins since the market is very unpredictable right now and don't know yet when it will start bull run.

[Superalgos]

The main trading idea of the strategy discussed in the OP is to identify short-term reversals as well as continuations and deepening of trends marked by a break down of the Bollinger Bands (BB) in the 1-hour chart, using the Percentage Bandwidth (%B) indicator, the Bollinger Bands Moving Average (BB MA) and the Bollinger Bands deviation to assess momentum and volatility, optimize the take position event, and filter out late entries.

In simple words, the strategy sells bitcoin as the price starts sliding down, and re-buys bitcoin once price stabilizes or the market is seriously oversold.

You may see the strategy in action for your self... It's open-source and available on Github.

[doomloop]

Bear market = make money by shorting bitcoin
bull market = make money by longing bitcoin

It is as simple as that! Remember that we complicate trading because we think we need to know more about the market in order to make more.  But that's not true. Technical analysis is giving you an edge over the market, risk management limits your losses and emotional control makes you stick to your edge and risk management principles.

It is simple but people fail to make the right decision at right time. This is the trick here., You cannot really judge or predict the behavior or future change of the market without having some sound knowledge and experience. Knowing a rule is one thing, able to implement it in a way beneficial to oneself is a whole different story. Dealing with the most volatile currencies is a bit challenging. The more you know, the better it is.

[gantez]

To do well in a bear market, a very good research is needed. Yes, bear market is time to buy more coins and hodl but not for all the falling coins. Some coins are being dumped at that time and won't recover from that. So if you buy a wrong coin then, you might wait forever to profit which likely won't happen.

[Superalgos]

If you stick with bitcoin, no research is needed. Just active trading using a very clear and structured system that has been thoroughly tested. That is what we are doing with the strategy mentioned in the OP.

[AicecreaME]

Bear market = make money by shorting bitcoin
bull market = make money by longing bitcoin

It is as simple as that! Remember that we complicate trading because we think we need to know more about the market in order to make more.  But that's not true. Technical analysis is giving you an edge over the market, risk management limits your losses and emotional control makes you stick to your edge and risk management principles.

Well... you nailed it. It is that simple.

The only issue is knowing when to do what. That is where a properly structured strategy comes in place.

Exactly, that is the tricky part of bitcoin's volatility, we don't know when it is going to drop or rise, so technical analysis is the solution for that, but you also have to be good on analyzing complex stuffs like bitcoin's price chart since the beginning, then the most crucial part of it is executing what you have concluded based on your analysis (still a theory or a prediction) which is still risky but worth to be tried if you believe in your skills in Trading.

[FanEagle]

If you stick with bitcoin, no research is needed. Just active trading using a very clear and structured system that has been thoroughly tested. That is what we are doing with the strategy mentioned in the OP.

That is a long research on its own, because if you really want to jump into trading, you also have to make lots of research on how to, and how most top traders are doing it, trading is not so easy, and like you rightly said, for any trader to be very successful, they need a clear structure which I think should be a well-developed skills and strategies, when it also comes to research, aside researching on how to trade for educational purpose, there is also need for any trader to research well on coins to trade.

In as much as bitcoin is the most reliable coin to trade, people cannot just be on bitcoin trading alone, there is still need for diversification, because it is not every time that bitcoin will always meet our needs, so there is still need for research in virtually most things that we do here.

[Mpamaegbu]

To do well in a bear market, a very good research is needed. Yes, bear market is time to buy more coins and hodl but not for all the falling coins. Some coins are being dumped at that time and won't recover from that. So if you buy a wrong coin then, you might wait forever to profit which likely won't happen.

I quite agree with you that some price fall signify dump but unsuspecting buyers may not know and they will dive on and waste their hard earned money. This isn't even about doing one's diligent research before buying in because most times one won't even know where to start with. Back to the OP, I think the best way to increase BTC holdings in a bear market is to tether. Then sell off tether and buy into Bitcoin once the signal for a bull run comes up. Buy BTC/USDT & Sell BTC/USDT should be it at every correction.