Investors usually stress the word bear market. However, this market downturn is unavoidable and is often for a short timeframe. Sometimes, it even provides precise investment opportunities. In this blog, we will learn about the bear market and the steps that can be taken to ensure the survival of your portfolio until there is a change in the market. 

What Is A Bear Market?

A bear market occurs when there is a significant drop in investment prices for quite a long time. The prices generally fall by 20 percent or more from their current high that is identified using the bear flag pattern. While the threshold is 20%, downtrends often go much deeper over a stable period of time, not all at once. Although the market contains a few occasional relief rallies, the trend is generally downwards. Gradually, investors start finding stocks that have attractive prices and start buying, which is the official end to the bear market. 

This market is usually characterized by investors’ pessimism and low confidence. During this market, investors often ignore any news that is actually good and continue with their selling process. This is the reason why the prices are continuously low. While investors may be bearish on individual cryptocurrencies, those sentiments do not affect the market as a whole.

However, when the market turns bearish, almost all cryptocurrencies start declining, even if you are getting good news and good earning from it.

Causes Of Bear Market

Just after or before the economy moves into recession, the bear market occurs. Investors thoroughly look for crucial economic signals that include hiring, wage growth, inflation, and interest rates. This way, they judge when the economy is slowing. 

When they witness a shrink in the economy, they expect a decline in corporate profits in the future. That is why they start selling their cryptocurrencies, pushing the market even lower. It can lead to more unemployment and arduous economic times in the future. 

The bear markets are comparatively shorter than the bull market. They are also not severe statistically as they have an average loss of 33 percent only. 

How To Invest In Cryptocurrency During Bear Market

The strategies you can use to invest in a bear market are as follows:

• It is always a good idea to explore the trends, research for crucial indicators, and seek professionals’ help before investing in the bear market. Since the bear market is highly volatile, thorough preparation helps you in fighting the market effortlessly. Some investors even make rash decisions hastily. Others go with their reasonable business approach. It is advisable to analyse the market situation from a technical point of view. You can also connect with the advisor and attain knowledge about basic notions and events in the crypto market. 
• Next, it is significant to diversify your assets and investment strategies. Although investors see cryptocurrencies as an appropriate additional investment, they forget the need to diversify their digital assets. The multiple variants of crypto investments vary in terms of risks and prospects for tokens. So, it is advisable to acquire a set of reliable tokens like bitcoin or ether and some altcoins containing a sturdy growth potential to tokenize immediately and increase their liquidity. This way, they are more accessible to retail investors and retain the former potential for stable growth. Again, we will advise you to conduct thorough research and only invest in those tokens that have a sturdy profile and a transparent business model. This way, investors are well aware of the benefits of the tokens.
• Lastly, be well-prepared for market volatility. If you want to survive the bear market, you have to be alert about the continuous leap in prices. This way, you will be able to avoid any debt or panic. Also, when a bearish market is rocking, it becomes relatively arduous to sit and wait. However, if you manage to come out from the panic-driven sell-out, life can effortlessly survive the market. 

Loss and profit are certain in the cryptocurrency market. However, there is no instrument available in the market that yields actual profits today. Also, when you deposit a larger amount you are at risk of losing all your money, So, whatever you do, this strategy will help you in surviving the market as a whole.