Five Strategies for Investors to Face the Crypto Bear Market and Still Profit
REPUBLIKA.CO.ID, JAKARTA — A bear market is an inevitable phase of price declines in the crypto market cycle. For many investors, this condition triggers panic and potentially damaging decisions.
However, experienced investors see it as an opportunity. Here are five strategies that can be employed to survive in the midst of a bear market, according to the Pintu Academy team.
What Is a Bear Market?
Quoted from Pintu Academy, the educational platform of the Pintu app, a bear market is a market condition where asset prices fall significantly and persist over a relatively long period. Unlike short-term corrections, a bear market typically lasts for months to more than a year and is accompanied by widespread negative sentiment.
In general, bear markets usually occur after assets reach an all-time high (ATH), followed by a market correction after a long rally. Selling pressure is also reinforced by other factors such as macroeconomic conditions, monetary policy, or geopolitical tensions.
The Crypto Asset Bear Market Cycle
Historically, the crypto market is known to have a four-year cycle closely tied to bull and bear market phases. This cycle centres on the Bitcoin halving event, where the reward received by Bitcoin miners is reduced by 50 per cent every four years.
New ATHs tend to form around two to three years after Bitcoin reaches the lowest point of the previous cycle. Within that span, the market usually experiences an accumulation phase or sideways movement, often utilised by long-term investors.
Five Essential Strategies in a Bear Market
Here are several relevant strategies to apply when facing a bear market, according to the Pintu Academy team:
- Be Patient in Selecting Assets and Buy Price Targets
When prices drop more than 20 per cent, many new investors panic and sell all their assets. Experienced investors instead see the bear market as a phase to accumulate undervalued assets.
What can be done:
Create a watchlist of assets with strong fundamentals.
Monitor price responses to Bitcoin declines.
Set buy price targets based on analysis, such as through historical support areas.
- Protect Capital
The primary priority in a bear market is to preserve capital so it does not erode. One proven effective strategy is Dollar-Cost Averaging (DCA), which involves buying assets routinely in fixed amounts without depending on market prices.
Simulation:
Investor A (all in) invests Rp 12 million at once when the Bitcoin price is around 47,000 US dollars, then its value drops significantly.