Historically, on average, every 3 years, there is a crypto bear market that lasts around 12 months. Bear markets are normal, but they are less frequent than bull markets. For example, two of the worst bear markets in Bitcoin’s history happened in 2014 and 2017, which lasted 59 weeks and 52 weeks respectively. The term “bear market” is defined as a market that has lost more than 20% in a given year and experiences a continuing downtrend. When investors are “bearish”, it means that they have a pessimistic outlook on an asset or market and expect it to fall in value. Currently, Bitcoin is down -35%, Ethereum is down -43% and many other coins are down by much more in 2022.
A crypto bear market can cause a great deal of distress for crypto traders. Also, it’s a scary situation for newcomers to the crypto realm. Sudden declines in market value can cause some to sell quickly while others hold, hoping for a turn in the market. Many lose faith in their investments during this period. However, some savvy investors understand how to turn a profit during a bear market. This downtrend might be stressful for investors but it can be seen as a good investment opportunity to buy in at lower prices.
Oleg Giberstein, Co-founder and COO of Coinrule an automated crypto trading bot platform, commented on the current state of the market and how traders have turned to Coinrule to make higher profits in the Bear market. He said: “While traders and investors dread the long bear markets, sometimes, a bear market could provide decent opportunities to enter the market with lower risks, higher returns, and dip-buying opportunities. Even in times of severe downtrend, it is possible to find some good opportunities among all the projects out there using an automated trading bot such as Coinrule. An option for managing your portfolio is to accumulate those coins that have a solid basis and are undergoing a steady development, letting an automatic trading strategy send the buy orders following certain predefined rules.”
“Crypto bear markets are painful to digest, however, if you believe in blockchain technology and its potential to disrupt many industries, there is a simple and effective strategy – aka HODLing. HODLing has proven to be the most profitable strategy, yielding massive long-term gains. In simple terms, HODL is an acronym for “hold on for dear life” and refers to the practice of buying a cryptocurrency and holding it, refusing to sell regardless of the market conditions. An even better alternative is to hold while using Coinrule to set up the automated strategy.” Giberstein added. Investors who have held back a reserve of fiat currency or stablecoins, or have expandable capital in their bank accounts, will have the ability to “buy the dip.” This common phrase used throughout the crypto industry refers to the practice of buying up an amount of cryptocurrency whenever there’s a significant bearish correction in the market. The idea is, that if and when prices return to their previous highs, the dip buyers will bank a nice profit. While buying the dip can be done in a single trade, the most recommended strategy is to implement Dollar Cost Averaging (DCA). This involves a crypto trader breaking up their reserve funds into smaller tranches and making several trades over time thus bringing the average purchase price down.
Giberstein said: “While some traders choose to trade only in bullish market conditions, there are strategies to profit even in bearish markets in cryptocurrency trading. Moreover, traders can use Coinrule to automate these trading strategies by creating rules and defining triggers. In cryptocurrency markets, it is absolutely possible to profit from a trade when the underlying trend is working in a trader’s favour. In other words, traders can make winning bets when markets go down if they play their cards correctly. As we witness the current onset of a crypto winter with most of the popular coins knee-deep in the red, it’s time we optimise our trading/investment strategies. This has encouraged traders to take advantage of Coinrule’s tried-and-tested strategies to survive crypto bear markets”.
As a result of the current bear market, there has been a spike in the number of crypto traders who have turned to Coinrule to make higher profits. To leverage trading during the bear market, Coinrule also offers many other features, such as Trailing Stop Loss, Trailing Take Profit, and Take Profit and Rebuy etc that can help traders protect their profits. Besides, crypto bots can trade hundreds of times faster than any professional trader, providing cryptocurrency traders with the advantage needed to make the most of this market. While exchanges are spending time on launching new tokens and assets to increase their trading volume, platforms like Coinrule are working on the right problems and are making sure that traders end up making some money in any market condition and enabling traders to set up different templates based on market trends to trade more strategically.