How to make money in cryptocurrency during a bear market

Cryptocurrency is an extremely wild asset class. This means things can often happen in a flash, and the money you made yesterday could be gone tomorrow. As investors, we have to protect ourselves from losses. Nobody wins money all the time, but there are ways to mitigate risk and ways to win money more often than not. I will go over 4 ways to increase your probability of making money in the long term.

1: Make sure most of the coins you are day trading in have a good possibility to go up in the long run. These are coins with a big market cap and lots of partnerships and growth possibility like Ethereum, which is currently at around 540 dollars. If you were to day trade Ethereum right now, you could buy in, wait until it goes up to 555, and then always sell it at a profit. If it goes down, hold it, and wait on a swing trade. Which brings us to our next point.

2: Don't sell your cryptocurrency at a loss. Just don't do it. Know that although it may currently be a bear market, there will be better days to come. This market isn't even at 10% of it's full potential yet. Many experts think that it isn't even at 5%. Since it is still very early days, the likelihood of it going down more than the current bear market in the long run is extremely low. Especially if you are holding a good coin like Ethereum. So be patient, and wait for a good increase to sell. A conservative person would sell every time they are up 5%, but I personally wait until I am up 10% to sell. When I was day trading, this would make me a good amount of money.

3:Learn how and when to short cryptocurrency. I will not go into detail on to how to do that; there are enough youtube videos on it and google is your best friend. Just know that this is a great, great way to make money, especially if you are experienced in it. The two main ways to short well is to either get in on some bad news early, or see that a blue-chip cryptocurrency is up 50-60% in a day. If you get in on some bad news early, since this market is extremely speculative, you will likely experience negative swings. You can capitalize on that if you short the money. If a blue chip currency is up 50%, it usually cannot sustain that momentum forever. Think about it. If Ethereum were up 50% in a day, it would mean that it's 53 billion dollar market cap would balloon up to around 79 billion. Is it possible to sustain that momentum? Maybe. But is much more likely there will be a pullback, and that is when you short.

4: Since in this post, the goal is to mitigate risk, we will go over a strategy that involves trying to get the money you invested out early. Say for example you bought Ethereum at 200. Once Ethereum hits 400, you should take 50% of your stake out, so that you would get out your total investment. That way all the money you are playing with is your profit money. Whether you are in a bull or bear market, position sizes are everything. Never invest all your money in one coin, and make sure that you have some money to spare when there is a correction. This is very important. Because cryptocurrency is so wild, having money to spare when there is a bear market makes it so that if you buy at the right time, you can make up to 30-40% in a day. Holding alt coins and bitcoin is great, but in the midst of all this excitement, you should not forget the value of holding fiat, which is relatively stable.

I hope these 4 tips can help you make money in a bear market, although I think the advice is also applicable during the bull markets. Good luck with your investing!

This is not investment advice.