Understanding a bear market.

[Rruchi man]

Because the market is highly unpredictable and moves with trends, different market conditions can result from different trends such as – A remark from an influential individual or a political decision that prompts a certain kind of action among other large, medium and small HODlers.

 If it is a positive market trend, it will result in a good market condition that may cause a “bull run”. If it is a negative market trend, it may cause investors to become bearish and some may quickly liquidate their crypto assets or convert to another coin for safe keep.  This action will cause a temporary or a slightly prolonged decrease in the value of a crypto and if this slump in price continues to like 10-20% from its former ATH, it is said to be a “bear market” somewhat close to what we are experiencing currently.

When there is a bear market, it is often common to hear among crypto enthusiast to “buy the dip”. Though it is a very profitable strategy or scheme to buy the dip and wait for the surge, the probability of loosing is not completely eliminated as the dip can get deeper afterwards and you run into looses even after buying the dip.

The aim and objective of this topic is to point out some strategy and key things to remember during a bear market in order to safeguard your portfolio. Some are;

(1)  Waiting and trying to pick a point in the dip that you believe is the bottom before investing is very risky as the point you pick might not be the bottom, perhaps just the top of the bottom. Adopting the strategy of investing specific amounts of money into your portfolio over time is advised. This ensures and helps you to avoid the temptation of putting all your money into a portfolio with no certainty.

(2) There is usually a lot of fear among HODlers of cryptocurrency during a bear market, it is very important that investors/HODlers during this period should think long term, because the temptation to sell will be there.

(3)  if you are too bearish and don’t have the confidence to remain in the market, simply convert all your portfolio to a stable coin or cash and wait for the market to recover before you join back in.

References
https://academy.binance.com/en/articles/what-is-a-bear-market
https://www.nerdwallet.com/article/investing/how-to-invest-during-a-bear-market

To the best of your understanding, feel free improve on this topic

[Obito]

Bear markets should also be an indicator for short-term goaled traders to exit the market before the loss is too much to take and then they can buy back into the market when the prices continues to go down and by that time, they should change their goal for long-term.

[pealr12]

Bear market is not that bad nor can it be avoided, I see it as a way of cleaning up the space for a healthier market, an opportunity for new investors to buy at a reasonable price, anyone in crypto should always be prepared for this period and also understand it won't last forever, bull and bear both have a time frame.

[semobo]

Crypto investors who completed few years in their crypto investing already know what is the bearish market can do to the holders so this time the old investors will be confident about what they are doing while most people who are panicking are the new people who joined into the crypto in 2021 just after it reaches its peak will not have the confidence to HODL for another 3 or 4 years nor their capital invested is not going to be sustainable for that long.

So basically investors need to change and what capital they are investing in the crypto market, one who invested emergency savings will get hurt and one who invested their profits from other investments will be ready to HODL for years to reap their profits.

[TheUltraElite]

Bear market is a test and a type of natural selection for weeding out weak hands. They are the ones who were looking for an easy profit and did not have any motive beyond making money. They are also the ones who create panic in times of drop and FUD in times of rise.

Although institutional investors follow a similar principle, they are going to sell quickly when the trend goes down and lead to the bigger magnitude of the crash.

The Point number 3 given by the OP is a wrong decision and should never be done unless there is a personal emergency. Converting to stable coins means that when the bear market ends and the bull market starts, you will defenitely miss out on the chance of making the profit.

However it is too early to start calling it a bear market, but lets see how well the weak hands hold.

[Mauser]

Also I would add that bear markets are very rapid. Especially in the crypto world is common to see a 10-20% drop in a single day. So if we as investors can't make sure to sell at the beginning of the bear market, it might just be better to hold our coins. As you said, it is very difficult to find the bottom of a bear market. If we are too cautious then we will likely start buying again too late, when the prices have risen again. And if we are too optimistic than we will buy while the prices are falling. To find the exact bottom seems impossible to me. The best strategy in my opinion is to just go and start buying every week a few coins, the chances to hit the bottom like that is better.

[Cnut237]

bear market

I would argue that we're not in a bear market, we're in a bull market. Context is important, and this is obtained by looking at longer term trends...

If you consider the price drops over the last week, it appears that the bear has arrived...


If we consider this against the longer-term price movements over the last year, we can see the last week as a downwards correction within a larger bullish trend.


So how do we achieve the best understanding of price movements? I would argue that the solution is to look at changes over the very long term, and with a logarithmic scale so that history is not smeared to a line. In this context, the terrifying price plunges of the last week are a mere blip.


Looking at log-scale charts is important for understanding anything that has exponential growth, for example the progression of Covid cases.

[Kakmakr]

Dude, we not in a Bear market.. we are being sabotaged by a group of Chinese with a vengeance against one of their rival Whales. Also a Chinese government with a hidden agenda, namely to sabotage all other Crypto currencies.. in favor of the "soon to be released" Yuan coin.

This was a strategic move from the Chinese government and a couple of whales to seriously damage Bitcoin's price. I hope the people who are buying those coins that was dumped by these people, will hold onto them ...to keep them out of the people's hands that wants to manipulate Bitcoin's price. 

[cryptomaniac_xxx]

Dude, we not in a Bear market.. we are being sabotaged by a group of Chinese with a vengeance against one of their rival Whales. Also a Chinese government with a hidden agenda, namely to sabotage all other Crypto currencies.. in favor of the "soon to be released" Yuan coin.

Very well said, China at it, entering the picture again to cut bitcoin's massive rise in the last 8 months or so. But what can we do, weak hands is exiting again, which is good indication that the bullish cycle is not over it, they just over react.

This was a strategic move from the Chinese government and a couple of whales to seriously damage Bitcoin's price. I hope the people who are buying those coins that was dumped by these people, will hold onto them ...to keep them out of the people's hands that wants to manipulate Bitcoin's price. 

Again, China have been in the game for so long that they really know when to enter and make significant damages by releasing negative news in the media. But we should look at the long term, for me this is just another test. Lots of month ahead for us to bounce back.

[jaysabi]

(1)  Waiting and trying to pick a point in the dip that you believe is the bottom before investing is very risky as the point you pick might not be the bottom, perhaps just the top of the bottom. Adopting the strategy of investing specific amounts of money into your portfolio over time is advised. This ensures and helps you to avoid the temptation of putting all your money into a portfolio with no certainty.

This is the most important point for investing in anything. If you are a high-conviction investor in an asset, the best way to purchase (especially if it is a volatile asset) is to dollar cost average over time. Regular, small investments at set intervals with the conviction to hold for the long term no matter the short term fluctuations.

[maydna]

The bear market should not be worried because we can leave the market for a while or still watching the price moves. We don't have to enter the market if we are afraid of losing the money, and we can calm down while we can prepare to buy the coin when the price reaches the bottom price. We don't know if this bear market happens because some groups say negative things about crypto, but it is what we see now, and we need to have patience and wait for the market can back to normal situations.

The new investors will not think about calm down instead will sell some of their assets and wait for the next downtrend time to buy back at a low price. But for the old investors will still hold their coins and wait for a good moment to buy back more at a low price. The old investors know what they need to do in bear market situations and control their emotions.

[Hydrogen]

It might be fair to say markets and history are composed of patterns which repeat over time.

There are parallels which could be drawn between today's world and ancient rome more than a thousand years ago. There are parallels which can be drawn between today's markets and the 1920s to 1930s era. Even within the last 10 years there are many instances of market trends repeating.

To understand things like bear/bull markets, it helps to have a basic comprehension of history and world events. These are fundamental forces play a large role in shaping the future direction markets will trend.

The only thing which allows history to repeat itself, is enough people forgetting the last time similar circumstances unfolded.

[cute nmp]

I never really understand the bear market fully upto now,it is difficult to make investment decisions or trade any altcoin unlike the bull market that one can easily made money by buying any altcoin without even making proper research on the project.Trading is also much easier than in the bear market most of us suffered the last time this happened in the market hoping history will not repeat itself this time.

[boyptc]

(2) There is usually a lot of fear among HODlers of cryptocurrency during a bear market, it is very important that investors/HODlers during this period should think long term, because the temptation to sell will be there.

I'm also a hodler but I don't fee any fear. Hodlers are really in the long term strategy, we don't care what will be the market today or tomorrow because we have goal of visioning what's in it on the next years to come.

Too bad that others don't understand what's being a hodler is. They think that it's just a few weeks or months and then if the market crashes, they'll panic sell which isn't a hodler thing to do.

[goaldigger]

We should also prepare ourselves for a long bear market because the bull this year was so strong so I also believe that we will go back from where we started, it could be deeper. The market bear trend is normal and part of the cycle, if you can’t handle it don’t engage yourself or if you already bought at the peak, then you’re one of those traders who became hodler, there’s still a chance for Bitcoin i just don’t know with the altcoins that you are holding.

[CryptocurencyKing]

(1)  Waiting and trying to pick a point in the dip that you believe is the bottom before investing

This is one of the most important part of crypto trading because, you never can vividly predict the market and as such, buying at where your most convinced is the way to go about this. Should you be waiting on the lowest low or dip, you might be watching the charts transcend from a bear market into a bullrun. Youve got to be satisfied with a point because, there really isn't any point that is very satisfactory.  You would always loose a few bucks on the way as regards profit and all. The most important thing is that, did you gain? And yeah, you can always gain if your ready to hodl. Develope the virtue of hodling until it gets to a point where your satisfied with its profit and then you can sell with a reason on profit.

[joniboini]

There is still a debate whether the recent dump is an indication of a bear market or not. Lots of people believe that it is just a shakeout to wipe out retail investors and attack major players (rumoured to be Justin Sun), and in the next few months the attackers will pump the market again.

Anyway, the recent shakeout definitely hurts a lot of people, regardless of the reason. On the other hand, it provides an opportunity to enter the market, as long as you can find the best time suitable for your own risk/reward profile.

[kryptqnick]

Buying the dip is like the strategy for ideal conditions because it's really hard to truly predict it. However, I think it's also not necessary. If someone bought BTC at $8k in 2018, this person would be down by 50% of the end of 2018, but with enough patience could easily sell at around $56k in about 3 years from when this person bought BTC, making 7x profit. 7x is not as great as 14x, of course, but it's still very impressive and also much easier to do because the price was at around $8k for a really long time. So IMO, it's wise to wait for some time and to buy when the price is low and stable, and then tough it out when the price is even lower, patiently waiting for the new bullish market which so far always comes.

[oHnK]

Dude, we not in a Bear market.. we are being sabotaged by a group of Chinese with a vengeance against one of their rival Whales. Also a Chinese government with a hidden agenda, namely to sabotage all other Crypto currencies.. in favor of the "soon to be released" Yuan coin.

This was a strategic move from the Chinese government and a couple of whales to seriously damage Bitcoin's price. I hope the people who are buying those coins that was dumped by these people, will hold onto them ...to keep them out of the people's hands that wants to manipulate Bitcoin's price. 

Whatever the reasons for this stimulant decline in price will still be called Bearish.  The beginning of the word Bearish was used because a bear (bear), will attack using its paws with a movement from top to bottom, describing market conditions when there are many sales which make the market decline or weaken, aka bearish.  So that in recent weeks the crypto market has indeed been in a bearish situation which is quite unsettling for investors who have bought at the top of the price.  Market cap alone in 24 hours has lost 200 B USD.  This will happen long enough for those who can not stand it will definitely cutloss soon.

[dezoel]

(3)  if you are too bearish and don’t have the confidence to remain in the market, simply convert all your portfolio to a stable coin or cash and wait for the market to recover before you join back in.

That is what most of the crypto traders including me do sometimes. When the price is falling down and keeps falling further I usually convert my crypto into stable coins and once the crash has stopped or at least minimized, I then buy the same amount of coins at a lower value. Recently when crash happened I was fortunate enough to sell my tron for $0.11 and was easily able to buy then at some $0.85 which technically means I have more coins than before although their value in dollars is less but that would be recovering in the coming bull runs.

There is usually a lot of fear among HODlers of cryptocurrency during a bear market, it is very important that investors/HODlers during this period should think long term, because the temptation to sell will be there.

That is a very common theory but when you have your saved money from years on the line, it is hard to not panic and sell them. Even robots would panic let alone humans .