When it’s the first bear market you’ve experienced, it can be an exceptionally difficult moment.
Many people experience the loss of their cryptocurrency holdings during this time, which is largely the result of extremely poor market decisions.
Here are some advice that should be used especially when the market is in the red in order to help you navigate these rough waters in the best way and come out uninjured.
Avoid panic selling
This is a common error among new traders and investors that transcends the realm of cryptocurrencies.
Indeed, maintaining impartiality and objectivity in your decision-making is crucial in circumstances as emotionally charged as a bear market. Making decisions based only on your feelings is never a wise trading technique.
During a down market, each of your investments should be supported by verifiable facts that have been carefully studied. And since FOMO is equally destructive to both sales and purchases, this applies to both.
Your watchwords as a trader or investor should be reason, calm, and hindsight, and this is especially true when the market is experiencing severe volatility.
Cut your losses as you please.
On the other hand, refusing to sell your investments when the time is right because you are too emotionally connected to them can cost you a lot of money.
Many cryptocurrencies that have experienced severe drops will never regain their highs during a bear market. This must be kept in mind so that you don’t strive to keep your bags “at all costs.”
Being too connected to your investments is just as hazardous as dumping them in a panic since trading is all about balance.
Do not attempt to predict the bottom.
Many inexperienced traders make the error of attempting to forecast when the negative phase will end when the market is in the red.
This is wrong for a number of reasons, the most obvious of which being that, no matter how much industry expertise you have, it is impossible to forecast exactly when. Although projections might be made depending on the circumstances, it is important to keep in mind that the market is unpredictable.
Additionally, if you adopt this mindset, you run the risk of being paralyzed and missing the market rally.
One of the best strategies to use when starting off is called dollar cost averaging. All you have to do is invest the amount you have set aside for yourself on a regular basis.
As a result, you can ensure that you don’t miss the market’s rebound and that you will continue to do well even if it continues to decline because you will always have money to invest.
Keep an eye on your mental health
Remember that your mental health comes before any cryptocurrency investments, too. Take a step back from the issue and spare yourself; else, it can consume you completely.
Maintain a broad, long-term perspective and never lose sight of these two points:
- Phases of a bear market are unavoidable and integral to the market.
- These are ephemeral.
You should be patient when considering whether to trade cryptocurrency. Furthermore, if you genuinely believe in your assets, then these fluctuations shouldn’t even bother you.
You can only survive in the volatile and emotionally charged cryptocurrency market by taking care of yourself and making good investments.
