Bybit's Bear Necessities: The Ultimate Bear Market Trading Guide
The bear market may seem dark and full of terror, but it’s important to bear in mind that just like the four seasons, it’s a natural phenomenon in the market cycle.
We’ve heard your concerns about the bear market — feelings of doubt, not knowing what steps to take; or on the flip side, wanting to gear up in preparation for the next bull run. Uncertain as it may be, fear not, as Bybit is here!
With our philosophy to “Listen, Care, and Improve”, we present Bybit’s Bear Necessities: The Ultimate Bear Market Trading Guide. This guide sheds light on bear market trading strategies — equipping you with knowledge and skills, while illuminating your way forward to safely navigate the wilderness of the bear market.
Are you ready to embrace bear market trading?
Read on to find out more!
What Is a Crypto Bear Market?
A crypto bear market is a period when the value of major crypto assets like Bitcoin fall by at least 20% from their previous highs and remain at that value due to fear and pessimism.
Crypto bear markets usually play out in the following four stages.
Recognition → Panic → Stabilization → Anticipation
How To Spot Crypto Bear Markets
Although it can be difficult to tell when a crypto bear market is starting, here are some telltale signs pointing towards the start of one:
Low Volume Due To Extreme Fear
Bearish Technicals and Charting Patterns
Fall of Major Crypto Projects
5 Handy Crypto Winter Tips
The most important tip veteran investors often give is to not fear crypto bear markets. While it might seem natural to stay out of the market during such volatile times, crypto bear markets often present the best buying opportunities for long-term investors. For beginners, we recommend:
Diversifying your overall portfolio by investing in blue chip cryptos and projects with solid fundamentals
Dollar cost averaging into your investments so the risk of timing the market is mitigated
Keen on learning more crypto winter survival tips? Read our beginner’s guide to investing in crypto bear markets. Alternatively, you can also give low-risk strategies like Bybit Savings and Dual Asset a shot.
A Bear Market Analysis
During a crypto bear market, emotions can run high as investors and traders panic sell positions in fear of sudden slumps. Thus, it’s important to gain a sense of the overall market sentiment and where the market is expected to head. For example, did you know that, as of the time of writing, ETH is now gaining market share at the expense of other smaller chains? Could this be a sign that consolidation is taking place in the Layer 1 space?
In our bear market report, we offer our take based on notable trends happening in the crypto space. From revealing on-chain and off-chain activities to exploring how investors can weather the bear market with DeFi, our analysis of the current bear market will help you better gauge the market’s health and aid you in your decision making process during the crypto bear market.
Beat the Bear: Stories and Tips from Daniel Chart Champions
We spoke to crypto bear veteran and Bybit affiliate — Daniel from Chart Champions — to weigh in his views on the current bear market environment. With more than a decade of stock and crypto trading experience, Daniel advocates the use of essential tools like Fibonacci Retracement, while breaking down key concepts such as leveraged trading.
Check out Bybit Bear Stories to find out more about Daniel’s bear market trading strategies and words of wisdom for newer traders!
Safer, Smarter Ways You Can Invest in Crypto Bear Markets
Bearish seasons may seem bleak, but every cloud has a silver lining. Even in this downturn market, there are always windows of trading opportunities that allow you to safely grow your crypto assets. Fortunately, we’ve got you covered with not one, but two Bybit Earn trading products that will help you invest and trade smarter!
Has the idea of competitive and guaranteed APY caught your interest? With Bybit Savings, users can earn stable yields by staking coins and tokens including USDT, BTC and more. Flexible and fixed terms are supported so you can generate maximum returns based on your investment time horizon.
Keen on learning more? Check out our guide to Bybit Savings that’ll teach you everything you need to know about staking with us.
If you’re willing to take on more risk and are comfortable with short-term speculation, Bybit’s Dual Asset is the perfect trading product for you. With APYs reaching upwards of 100%, Dual Asset nets you high returns in markets with low volatility. All you have to do is predict the direction of a specific crypto asset within a set timeframe and Dual Asset will do the work in maximizing your returns.
Find out more by reading up on our guide to Dual Asset.
Curious about what each investment option offers in a nutshell? Check out our handy infographic below.