The bear market offers fewer opportunities with a much lower risk-to-reward ratio. What’s more? retail liquidity is flushed out of the market and you’re left competing with battle-hardened and experienced traders with resourceful tools and ample liquidity in their arsenal.
These are the type of soldiers you run from in an actual battle.
However, with a plan and some rules, you’re sure to pull through. Let’s take a quick review of some rules to consider;
- Liquidity is King
Capital preservation is the first priority. You want to lower your risk appetite to adjust to the bear conditions; bet less, bet scarcely.
This is where risk management comes in; Don’t just stack sats, protect your Benjamins too
- Bet no more than you can afford to lose
- Bet only on high-conviction trades
- If you’re down bad and you need some action create a separate wallet for degening and fund with <10% of your portfolio
- When degening, believe with all your heart that everything that can go wrong will go wrong
- Deal with your greed;
focus less on upside potential and more on your loss. Upside potentials create euphoria and the urge to take dumb risks.
Stay stoic, be a realist, and accept losses before taking risk
- Strictly Follow liquidity
You have no luxury of marrying your bags or fav narrative in the bear market. Have you noticed how, almost like clockwork, a new narrative emerges every month since January, leading to short-term profits, only for things to slow down by month’s end, and then a new narrative takes its place in the following month?
This is not a random pattern, it’s a market behavior that regurgitates liquidity and rotates it into the next shiny narrative.Now hold that thought for a second then think about what happened to traders who didn’t sell their Meme 2.0 bags cos “price should go higher” even when volume is dropping.
It’s no surprise, really; the liquidity left in the market is too tiny to go around
As soon as you start catching signs of dwindling momentum in price Action, Pack your bags and run for the cliffs before you get dumped on cos you WILL get dumped on.
- Tilt Asymmetric information in your favour through relationships
There will be fun times when volatility is high and everyone is living off adrenaline and there will be lots of boring days when BTC becomes a stablecoin. This window is your chance to make connections, build relationships and share value. you’ll never know who’s watching until they need you
- Create on X, don’t just consume. By offering value, you position yourself to be offered value.
- Engage posts on X and leave an impression upon which you can build in the DMs; use this as a guide
- Learn strategies and Proficient tools
You must do whatever you can to stand among victors. This includes refining your battle strategy and sharpening your battle axe
Your experience won’t matter if you don’t have the information, fast execution speed and automation that certain tools give you.
Also, trading dynamics differ in every narrative; You don’t want to trade utility tokens the same way you trade memes.
Refine your strategies
- Trade news
In a crab market such as this, trading volatility gives you good volume to leverage on and volatility usually finds their roots in blank swan events and project news
To put this into perspective; $XRP literally pulled a 100% move after the SEC case ruled in it’s favor,a 10x Leverage on half the move will 5x your margin under minutes. Now imagine how much you’d make if you shorted the $LUNA collapse.
These news creates volatility that defi traders can leverage on but some of us don’t want to explore news trading because we don’t want to fund CEXes; Understandable and spoken like a real DeFi native, here’s a solution to that hiccup.
- Kill the winning mentality
Lastly you have to kill the winning mentality and turn on survival mode. “I have to reach this target”, “I have to walk away with a “5x” are luxury only the bull market can give you. Take what the market offers and not want you demand from it. I’m not saying be docile, I’m saying do not be complacent.
These are lessons I have learnt from my experience, do share your experience in the comments below so everyone can learn from them.
Have you learned something new with this read? consider following me at @god_crypt.