3 Ways to Trade Bitcoin and Altcoins During a Bear Market

The markets are scary right now, and while the conditions is likely to get worse, that doesn’t mean investors need to sit back and watch from the sidelines. In fact, history has proven that one of the best times to buy Bitcoin (BTC) is when no one is talking emboîture Bitcoin.

Do you remember the crypto winter 2018-2020? I do. Hardly anyone, including the mainstream media, has been talking emboîture cryptocurrencies in a fondatrice or negative way. During this time of an extended downtrend and énorme sideways chopping, manière investors have been piling up in preparation for the next bullish trend.

Of voyage, no one knows “when” this parabolic advance will happen, but the purpose of the example is to spectacle that cryptocurrency may be in the crab market, but there are still great strategies for investing in Bitcoin.

Let’s genre at three.

Agglomérat by averaging cost in dollars

It nation to be unaware of prices when it comes to investing in assets for the énorme term. A price-neutral investor is immune to fluctuations in value and will select clair assets they believe in and continue to add to positions. If the project has good fundamentals, a strong and empressée use case and a healthy network, then it makes sense that only the dollar average cost (DCA) is set in the center.

Take for example this chart from DCA.BTC.

Average weekly dollar cost results in bitcoin. Primeur: DCA.BTC

Investors who bought $50 in BTC per week for two years are still making a intérêt today, and with DCA, there is no need to make trades, watch charts, or subject themselves to the emotional tension associated with trading.

Trade the trend and get away from the lows and the extremes

Regardless of the average fixed dollar cost and reasonably sized, investors should build a war fund of dry powder and sit on their hands waiting for buying opportunities from generations. Typically entering the market when there is significant oversold and all metrics are extreme is a good fonction to open éblouissement énorme positions but with less than 20% dry powder.

When price and asset indices are far from a courant deviation or more than habituel, it’s time to start looking around. Some traders zoom out to a three-day or weekly time frame to see when an asset will congru to higher time frame armature levels or previous all-time highs as a sign of investment.

200-week moving average heatmap for bitcoin. Primeur: LookIntoBitcoin

Others are looking for price to reverse the supérieur moving averages like 118 DMA, 200 WMA and 200 DMA léopard des neiges again to armature it. Chain fanatics usually follow the Puell Nombreux, MVRV, Bitcoin Pi or Price Realized Curseur to see when multi-year lows are reached as a sign of when to buy.

Either way, opening éblouissement buys during heavy selling usually turn out to be a good jazz trade or even the entry susceptible for a énorme multi-year trade.

Related: One Moon? Maybe Not Soon: Why Bitcoin Traders Should Make Friends With This Trend

Do nothing until the azimut changes

Trading during a bear market is difficult, and preserving bien and portfolios is the top priority. For this reason, some investors are better off waiting for assurance of a trend dicton. As the saying goes, “The trend is your friend.” Everyone is a genius and a great broker during a bull market, so if that’s you, wait for the next bullish trend to roll around and become a happy genius.

Downtrends, fixation and bear markets are notorious for cutting traders and reducing the size of their boîte, so it is not wise to trade against the trend unless one has a fondatrice PNL method for trading during downtrends and some skill in culotte selling.

For cryptocurrency investors, it is hautain not to en public in a vide and monitor the fret markets. Cryptocurrency traders gîte to foyer only on the cryptocurrency markets, which is a mistake parce que the fret markets, Bitcoin and Ether (ETH) prices have shown a strong correlation in the past two years. In the set of charts one chooses, it would be wise to keep the S&P 500, Dow Jones or Nasdaq charts along with the daily BTC or ETH chart.

Bitcoin’s correlation with fret markets. Primeur: TheBlock

In the latest reversal of the trend, the BTC price marche was the canary in the coal apparence that started to tweet louder and louder as the US Federal Reserve amplified its intent to raise interest rates. It is easy to be misled by the insignificant moves occurring in the daily and daily fourneau hour Bitcoin price charts, and one can easily be drawn into some huge positions based on the belief that BTC is emboîture to reverse.

Watching the market contexture and price marche of the largest fret indices will provide dangereux insight into the strength and duration of any upward or downward trend that Bitcoin may exhibit.

This newsletter was written by Big Smokey, author humble lover Substack and Cointelegraph’s resident newsletter author. Every Friday, Big Smokey will write market insights, headlining tips, analysis and early research on potential emerging trends in the cryptocurrency market.

disclaimer Cointelegraph does not endorse any product toilettes on this folio. While we aim to provide you with all the hautain événement we can obtain, readers should do their own research before taking any ouvrages regarding the company and take full responsibility for their decisions, and this feuilleton cannot be considered as investment advice.