The crypto market has taken a big hit from Bitcoin’s record high valuation of nearly $20,000 in December of 2017, and while panic might seem to be the only reasonable choice given how low the market has gone, staying calm is vital in a bear market.
It’s easy to find ourselves concerned about our money disappearing, especially with the fear mongering loudmouths who like to tell you, “I told you so.” Keep in mind, however, that bear markets are inevitable. The stock market didn’t become the distinguished entity it is today by avoiding ups and downs along the way. Market cycles are normal, and they’re positive for the maturity of the market.
Put your emotions aside, and let others panic while you tackle the bear market with prowess, proving to others that bears are nothing to be scared of.
Familiarize Yourself with Crypto Trends and Key Indicators
The best way of understanding how to stay calm in a bear market is to research the trends and indicators within the crypto market as a whole. Stop listening to your friend’s dad’s advice, a random stranger on the internet (including me), or those lengthy Facebook posts about what to do. Instead, start doing your own research to gain the knowledge first hand on the methods of basic technical analysis and thorough research and fact-checking.
Understand a coin’s moving average. This indicates the average price over a period of time and can help put the trends you’re tracking into perspective rather than getting you distracted by random price fluctuations. Study indicators of crypto price movements from relevant news articles from trusted sources. Study new laws and regulations and movements from significant crypto investors and institutions. Do your homework.
You’re less likely to make irrational decisions in a bear market when you actually understand the current state and how it got there, rather than trusting unreliable sources with no proof of their findings, or an “influencer” with an apparent sixth sense for when and how the bull market will return.
Don’t Panic Sell or Make Irrational Risks
Sometimes, your best bet in a bear market is to not do anything. We’ve all been there. At times like these, the temptation to pull out our investments, or to make irrational and riskier investments to salvage what we have left, can be tough. The best approach to your crypto investments doesn’t lie in more risk, however, but in avoiding making emotional decisions. As a friend of mine eloquently put it, “I’m not touching it right now. I’m desperate, and I’ll make a stupid decision.” During a bear market, sometimes the best thing you can do is to put it aside and not impetuously make those mistakes that are common during a crisis.
Bear markets can make a sudden comeback. As the… ehm… interesting John McAfee put it, “Bear markets are like Winter. It’s always followed by a glorious Spring. F#@&ing relax.” By panicking and allowing your emotions to take over, you might regret the decisions you made when the market potentially rises again, which I believe it will, regardless of if that’s next month or next year.
Staying calm is vital in assuring your future crypto wallet stays healthy. The market might be at a low, but you must remember, fluctuations are unavoidable, and how we respond to those fluctuations will define where we stand once the market potentially rises again.
Disclaimer: I am, of course, not a financial advisor. None of the content in this article is financial advice.