Surviving the crypto winter: strategies for navigating a bear market

The cryptocurrency world can be exciting and volatile; no year exemplified this more than 2022. After a strong bull market in 2021, 2022 saw a major correction in Bitcoin, with prices plummeting by over 75%. The collapse of several high-profile projects, such as Luna and Alameda, and the bankruptcy of companies like Block Fi accompanied this bear market. There were also several major hacks of DeFi protocols and a leak of 100,000 API keys from the three commas platform.

It’s natural for investors to feel anxious and stressed during a bear market. The constant fluctuations in value can be unsettling, and it’s quite easy to get caught up in fear and uncertainty. However, it’s important to maintain a healthy emotional and psychological state, as this can help you make better decisions and avoid rash actions.

What is a crypto winter?

Crypto winter is a prelude to the coming of the crypto night king, the bear market. Crypto winter is an umbrella term that describes bearish sentiment across the market. Of course, we witness downturns in other financial markets as well. But crypto winter is special. Why? Because the downswings are often violent, sudden, and longer. So, how do you prepare for this event? What are the dos and don’ts? Keep reading to find out!

Tips to navigating bear markets

There’s no need to fear a bear market as long you’re prepared. You can use the opportunity of a bear market to review your strategies and fine-tune them for any potential issues that may arise. In this article, we’ll walk you through four strategies and mindsets that can help keep you safe during bear markets – no matter how bad it gets!

Keep your emotions in check: Most of the time, emotions are the triggers for bothering good and bad decisions in our daily lives. This is also applied to cryptocurrency. Cryptocurrency markets can be highly volatile, and prices fluctuate rapidly. It’s essential to keep your emotions in check and not let fear or greed dictate your investment decisions.

Diversification: Do not put all your eggs in one basket! Your asset allocation strategy should cater to your needs and preferences. In order to not risk losing everything in one basket, it’s important that you have a diversified portfolio with investments ranging from crypto, commodities, stocks, bonds, or cash, depending on what’s best for achieving your goals over time. 

Invest what you can afford to lose: Investing is important, but so are your groceries and mortgage. It’s unwise to take short-term funds (i.e., money for the house) to invest them into the markets. Bear markets are an undeniable part of investing and can be extremely destructive; even minor corrections may affect your investments deeply!

Accumulating with dollar-cost averaging: The first thing to remember during times of slowdown is that it’s normal for markets to have negative years – it’s all part of the cycle. If you wish to play the long game, one option is to leverage dollar-cost averaging. Purchasing assets regardless of their price over a long period often means you also end up trading at a low price when the market is down. Over the long run, your overall cost will reduce and leave you with a better overall asset price.

Look for value: Bear markets can be great opportunities for investors. The secret is to know what you’re looking for. 

Stop-loss orders: Stop-loss orders can help you limit losses and protect your investments during market downturns. Set up stop-loss orders to sell your Bitcoin automatically if prices fall below a specified level.  

If this is your first crypto winter, welcome aboard. It’s a phase that defines you as a person, for what doesn’t kill you makes you stronger. And history tells us that all the top-performing projects of the previous bull run, like Polygon and Cosmos, were created in the preceding bear runs only. So hold on tight; things will get better soon!

Sell your cryptocurrency for cash on Astro Africa 

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The crypto exchange platform you decide to use for your trades determines your success as a trader.  In Nigeria, the best  crypto exchange platform is Astro Africa. Very few exchange platform in Nigeria  have been able to redefine crypto exchange in the way Astro Africa has done it in the past years. Astro Africa is very intentional about ensuring that Nigerian traders make profits whilst promoting utmost safety. 

Astro Africa is well secured because the platform is fortified with impenetrable firewalls that make it impossible for unauthorized access. New and old crypto traders will enjoy trading on the platform because the user interface is easy to use and intuitive. To get started, download the app from Play Store or App Store or visit our website to create an account.

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