The crypto market is full of incredible opportunities, but frequent ups and downs can make even the most seasoned investors unsure about how to react. To help everyone make the best choice in all situations, we collected the best things to do both during a bear and bull market—the last one will surprise you.
Let’s begin by looking at what bear and bull markets actually mean. In short, a bull market is a relatively long period of time when prices tend to climb higher and higher, while a bear market is when most valuations notoriously decline over multiple weeks or even months. When prices start a pattern, but return to their starting point in a few days, we only talk about a bearish, or bullish, sentiment.
With the basics out of the way, let’s see the top things to do during the times most investors want: a bull market. Right off the bat, we have to distinguish between those who have open positions in a bull market, and those who are thinking about buying.
Whoever bought in before the run should revisit her/his long-term goals, and stick to them. For instance, if the aim was to reach 25% profit, and the bullish conditions made it happen, realizing gains could be an option. A great way to exit a position in a bull market can be setting a trailing stop loss, which is essentially an ordinary automated seller that raises itself with the prices and liquidates the position when values start to dip.
On the other hand, those who haven’t managed to secure assets before the bull market have to follow a different strategy but similar principles. This means that if you don’t have assets from the bull market, you could consider getting in as soon as possible and setting a similar trailing stop loss, just like those who had positions before the positive development. This way you optimize your profits by taking advantage of the price movement.
Things can go south sometimes, but that does not mean there’s nothing to do. In fact, the best traders tend to set themselves apart from their average counterparts by acting calm and professional during such times.
Again, let’s see what to do if you have open positions first. The number one thing that you should ask yourself is why did you buy your assets in the first place. If the answer is quick profits, it might be best to consider selling. However, if you got in because you believe in the longevity of the project, exiting your positions is usually not the best idea.
Those that don’t own anything in a bear market are faced with an even greater question: is this the time to buy in, and if so, when? The answer is quite simple, it might very well be the best time to get in, but it’s impossible to pinpoint when it’s best to do so. Thus, you could set a theoretical percentage drop you’d like from the price of an asset before the bear market kicked in; the time when that’s reached is likely your best chance for buying.
Be it a bull, or bear market, the majority of traders and investors seem to hesitate too much and ask themselves too many unnecessary questions. If you try to follow the tips outlined above, and consider your long-term goals and beliefs in the meantime, you will possibly become one of the few who actually benefit from both environments consistently.
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