Top 5 Ways to Profit in a Crypto Bear Market

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Top 5 Ways to Profit in a Crypto Bear Market

Top-5-Ways-to-Profit-in-a-Crypto-Bear-market

Bear markets make a lot of money for investors and traders alike, the problem is… they just don’t realize it at the time. 

You have to understand, the market has an ebb and flow nature to it. Just like most things in life, crypto markets are far from being excluded.  If a crypto bear market has halted your altcoin trading, you were never truly a trader to begin with.

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Any idiot can turn a profit in a bull market, however bear markets are what differentiates real traders from the wannabes. These are the times where knowledge, discipline, and profits are carved for those who can willingly handle them.

Any market you trade doesn’t need to move up in order for you to profit, it simply needs to move. As long as you can adequately identify the trend, you can walk away with a profit on just about any type of market. The shorter the trend, the greater the risk, the quicker the payday.

With that said, let’s take a look at the top 5 trading strategies you can use to turn a profit in a bear market.

#1 Margin Trading (AKA – Shorting)

Cryptocurrency exchanges like Bitmex, Poloniex, Bitfinex, and Okex (yes we got all the Xs in there) offer an incredible way of profiting in a bear market. A 10% dip can bring you anywhere from 10-50% profit dependent upon your leverage.

While it may sound a little crazy to buy at a peak (as opposed to buying the dip), margin trading can bring in massive profit if done right. You don’t have to become a professional technical analyst in order to do this. Mastering the basics of charting will be required in order to produce consistent profits with margin trading.

Studying chart patterns along with real-world experience will give you a good grasp on the basics of technical analysis. Once you accomplish this, you can pick your entry and exit points with confidence. This will allow you to have a better chance of buying near the top, right before the market turns red.

Crank up your leverage to 2-5X (I don’t typically recommend going over 5X) and you can find yourself sitting pretty in a bear market. It’s important to note that the higher the leverage, the quicker you will be liquidated out of your position.

For example: margin trading $1000 worth of coins at 10X leverage will completely wipe out your balance once you hit +10% (actually lower than that counting the fees). Be sure to keep this in mind if you decide to use a high rate of leverage.

The rewards for mastering margin trading can be great, but only for individuals who truly have a well-developed understanding on the basics of technical analysis.

Click here for our complete A to Z Guide to Margin Trading located here.

#2 Scalp Your Way to Crypto Profits

Regardless of which way the charts are moving, scalping will allow you to profit off those incremental movements on just about any chart. All it takes is a little willingness to grind it out for a few hours in front of your computer using frequent bid and sell opportunities during increased volatility. A bit too monotonous for you? Try using trading bots in order to automate this process once you get some experience under your belt.

Like any other trading strategy, scalping is not without its inherent risks. All it takes is one major dip to erase all your hard work for the day. So just remember, don’t get greedy. Walk away with 1-5% profit and keep a tight stop loss in order to prevent these inconveniences.

#3 Hunt for Hidden Profits in Low Volume Coins

Low volume coins are typically not as affected (or not affected at all) with the plummeting price of Bitcoin. Unlike standard altcoins, which tend to follow in the same direction as Bitcoin, low-volume coins follow their own agenda. Consider anything with a daily volume below 50 BTC to be low volume (even 100 BTC in some cases). 

There are a number of low-volume coins that you can scalp or swing trade in order to manage a nice sizable profit. If you’re going to go this route, use the same tips I outlined above for margin trading. Make sure you have a basic understanding of technical analysis and always set a stop loss (either mental or triggered stop).

With trading low-volume coins, you have another high risk/high reward scenario. Make sure when trading low volume coins, you have enough liquidity to get out of the trade when needed. I typically won’t trade a low-volume coin that has a daily volume of under 10 to 20 BTC.

The sweet spot tends to be around 30-50 daily volume of BTC. I can’t reiterate this enough, set a mental stop loss (or alert) just below a major support as most of these coins can drop 20% in under an hour (sometimes in under a few minutes). Make sure you keep a close eye on the chart once a major support has been broken. More often than not, whales (large investors) tend to short stop losses on support and then subsequently rally hard thereafter.

PRO TIP: never scalp with 100% of your overall capital. You’re the only one who can determine your risk tolerance, but scalping with 5 to 10% of your overall investment is typically recommended.

#4 Seek Out A Solid ICO Investment

ico-to-invest-in-crypto-cryptocurrency-investment

Start by visiting your favorite Reddit threads, cryptocurrency forums, or Facebook groups and see what ICOs are buzzing around the crypto sphere.  Accumulate a list of ones you find interesting or have been mentioned several times on multiple venues. This is where you will accumulate your ICO list to further investigate.

Type each one of your ICO’s into Google and CoinMarketCap in order to uncover company information like development teams, whitepapers, twitter announcements, and other various chatter on the internet regarding your potential investment.

Next, take notes on the information you uncovered during your research and rate each ICO from 1 to 10 regarding how comfortable you feel with investing in each. Remember, investing in an ICO is risky business. You can lower that risk substantially by doing your due diligence and proper research.

Check out ICO Marks for the latest ratings on live and upcoming ICO’s.

#5 Look Over Freelance Crypto Jobs

If your crypto investments just aren’t paying the bills and the thought of looking at charts and doing technical analysis makes your head spin, perhaps you need to look at another route.

Getting paid to do freelance work in cryptocurrency may be right up your alley. 

There seems to be an increasing amount of jobs where employers are looking to pay their employees in cryptocurrency. Take advantage of these employers as you can most likely get 10-30% more profit out of the same job you would get paid for with standard fiat currency. 

Check out our list of cryptocurrency job sites below…

Ethlance – one of the more popular cryptocurrency freelance sites. They pay in ether and have 0% service fees.

Coinlancer – a blockchain based freelancing peer-to-peer decentralized job market platform.

XBTFreelancer – employers pay for freelancers in Bitcoin. They tout low service fees.

CryptoGrind – much like standard freelance site, CryptoGrind offers a “Bitcoin escrow” to ensure that employees receive payment for services provided.

Jobs4Bitcoin – a Reddit job board with employers looking to hire all facets of cryptocurrency freelancers and various blockchain job positions.

Go Outside, Exercise, Live Your Life. The Crypto Market Will Always Be There When You Get Back

I didn’t add this to my “Top 5” list as this won’t proactively create income for you in a bear market however it will prevent you from losing more money than you should.

One of the biggest mistakes people make, on a daily basis, is not stepping away from their computer or smartphone. In this constantly demanding digital era we live in, the obsessive barrage of technology can literally drive you mad. This slow and repetitive process can disrupt the logical mechanism of your brain, which will inherently screw up your trades. That’s why it’s very important to make sure you unplug from these devices from time to time.

Just taking an hour to exercise, walk in the park, or enjoy your favorite recreational activity can be enough to reset your mind to a state of balance. We tend to spend so much time in front of our computer screens that tunnel vision starts to set in. When this happens, we make more mistakes than we should. Realizing, not doing anything can make you money by inherently not allowing yourself to make foolish mistakes, therefore losing the capital you worked so hard to make.

Always maintain a good balance of work, rest, exercise, and play. Wake up every day with a clear goal in mind while maintaining balance in your life. Realize this balance is imperative to obtaining the results you want. With this knowledge; you can survive anything… even the most bearish of markets.

If you found this guide interesting, please leave a comment below. I’d love to know what what my audience does during these bearish markets.

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