A look at the three distinct phases of a bear market and what trading strategies to deploy during each.
In a professional trading environment, where the main strategy is backed up by sufficient information and knowledge, the ability to analyze and trade with the help of crypto trading platforms, for example, crypto trading automation, but also, of course, with little luck.
The most relevant topics are the stages of the bear market, what is worth knowing, and what every trader should be afraid of.
The first stage is the correction
Inspiration, greed, and excitement from the bull market are still present. Individual trends are still shooting, and quite briskly (M2E, NFT).
The market is gradually rolling back, but it does it quite smoothly, which gives the impression that the estimates of many projects are simply approaching their fair prices.
Everything seems to be in order. This stage is nothing like a bear market. Public sales are active, there are enough investors, and projects continue to develop actively. They only sell “paper hands”.
The second stage is surrender
According to the author, at the moment we are at this level.
And here the eyes begin to open. Individual trends that felt very good suddenly fly down without rebounds. Altos make up to -90 percent, and then continue to lose a significant part of their capitalization every day.
Companies are starting to cut employees.
Luna in its own way was some hint of the second stage. During the second stage, “Diamond Hands” are sold not because they want to, but because they have to. As an example: Celsius probably don’t want to sell, but they have to.
For Luna and Celsius, we expect other similar examples.
During the second stage, any correction from the fall will be considered an opportunity to exit at a better price. In other words, the rebound of a dead cat.
Companies that need high prices for their tokens will be crushed. Founders who buy their own tokens to support their projects will also be crushed.
The lower the prices, the louder the roar of the bears will sound. The louder the bears, the lower the price will be. This creates a vicious circle, and as a result, inspiration is replaced by anger.
The third stage is a bottomless abyss
After a deep drawdown comes the time of maximum exhaustion of the market: there are no rebounds, there is no inspiration. Prices consolidate in a sideways trend or slowly move down. It’s boring. At the bottom, anger is replaced by silence.
During the third stage, you will want to leave: the regulators will definitely remind you about themselves because they “warned”. Most of the favorite bloggers on Twitter and YouTube will be silenced. Talented developers will leave. Many companies will go into oblivion.
Stage 3 is the most difficult for survival
- If you represent a crypto company, do your best to survive this bear market.
- If you are a developer, stay interested. Find other developers and other companies. Build with them all over again from scratch.
- If you are an investor, develop your own theses. Place bets on people you believe in. Find a community of like-minded people.
Don’t lose sight of the big picture
- There will always be cycles, we are building a new world without old borders.
- The crypto market is young, and it will take decades, not years.
- Reduce the focus of tracking charts – relax. Close your computer and go for a walk.
We will have to lie low, create new values and survive for some time in order to eventually come to what each of us wants. Things will get worse before they get better.