If you’ve been following the world of cryptocurrencies, then you know that the bearish trend has now lasted a full year. Prices started to drop after reaching Bitcoin’s all-time high of nearly $20,000. Today, Bitcoin is valued at around $3,500—and investors can’t help but feel anxious about leaving the market entirely. While a bear market is a place you wouldn’t want to find yourself in, it’s important to develop the right mindset to survive through it.
Why is the bearish trend still going?
Many investors wonder why the bearing trend doesn’t seem to show any signs of slowing down. Sure, prices may rise a bit, but a steep decline typically follows. It’s easy to say that Bitcoin has enjoyed steady growth over the past ten years, but expecting this trend to continue wouldn’t do you much favor. In the real world, the progression of crypto prices is anything but linear.
You’ve probably seen different cryptocurrencies drop in value by more than 100% overnight multiple times. It’s time to understand that in the crypto space, you just can’t expect to make money without working. Making money in crypto isn’t as simple as some people make it out to be. By understanding the foundations of the crypto market and with the help of useful trading tools like Qprofit System Test, you’d have an easier time navigating the inevitable bear market.
What to do during a bear market?
It may not be apparent at first, but bear markets can prove beneficial for all market participants. The primary reason for this is that a bear market clears “malinvestments” generated by a bull market. The staggering increase in Bitcoin’s value in December 2017, for example, was due to the large volume of capital that entered the market. People wanted to profit from Bitcoin, and as soon as it reached an all-time high, they took their money.
ICOs are a great example, too. There was a time when people eagerly anticipated ICOs because they seemed to be a surefire way to make excellent returns. A whitepaper can generate tens of millions of dollars. But after the ICO, the coins may drop in value because the early investors didn’t really believe in them. They only wanted to invest and grow their money quickly.
Another reason why a bear market is good is that investors can see which coins appear to have longevity. Just as in the wild, only the strongest can survive in the cryptocurrency market. Countless crypto projects that showed potential in the past are now gone. A bear market can be viewed as a smarter market since it can lead to better allocation of capital.
Perhaps the best thing about bear markets is that it develops your character. It’s common to hear people saying that the early adopters of Bitcoin were lucky. But anyone can still make a fortune in crypto by working smarter and harder. You can’t assume that being a long-term investor is easy because it isn’t. It can be tempting to sell your assets as soon as they reach a new all-time high. It takes some serious conviction to hold onto the coins that you believe in—whether the market is in a bearish or bullish run.
Bear markets are an inevitable part of any economy. But instead of wasting your time and energy wondering when the market will boom again, prepare yourself by increasing your knowledge so you can redistribute your resources into more profitable digital assets.