There’s an old adage that during a bear market, the wisest move is to play dead!
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The first time I heard this advice in National Geographic, I laughed.
But then I realized it could also be applied quite literally to crypto investing.
Just as you would when encountering a bear in the wild, navigating a bear market requires a strategic approach.
Here are the strategies I follow to stay sane and protect my crypto portfolio in a bear encounter.
I. Be Calm and Don’t Panic!
In the wild, when encountering a bear, the worst thing you can do is panic and run. Bears can sense your fear and become more aggressive, exploiting your fear to their advantage.
Not gonna lie, I used to panic and freak out at the slightest sign of dip in the market. This led me to lose money multiple times.
It took me years to learn how to react and control my emotions in the face of market volatility.
Over time, I got used to the feeling and came to understand that the market is cyclical. Downturns of 20%, 30%, or even over 50% are just part of the natural cycle in the crypto jungle.
No matter what the fearmongers say — whether it’s the news, your favorite crypto guru, or that one friend who thinks he’s the next Warren Buffett — never panic!
They’re like the bear trying to spook you.
If you’ve done your research and you believe in the crypto projects you’ve invested in, then stand your ground!
II. Have a Plan and Stick to It
Now that you’re calm, composed, and holding your ground, it’s essential to have a clear plan when you encounter a bear.
You could slowly back away or use bear spray. Sticking to your plan is key to surviving.
Similarly, In this highly volatile market, you need a well-thought-out investment strategy and stick to it even during downturns to help you weather the storm.
I keep my plan simple by setting up two crypto portfolios which I call HODL and YOLO portfolios.
HODL Portfolio (Cold Wallet)
This includes the coins I trust the most, like BTC, ETH, and SOL.
I store them in a cold wallet to avoid making impulsive decisions, such as selling too early or trading on leverage after being too drunk while having a few bottles of beer.
Keeping these coins out of exchanges also gives me peace of mind, knowing my assets are safe from exchange collapses, like the infamous FTX incident.
YOLO Portfolio (Central Exchange)
This portfolio consists of newly launched coins, those coins that haven’t gone through many past bear markets yet, and of course, my shitcoins.
I keep these on exchanges for easy reallocation during a bear market. By also leaving these assets on an exchange, I can use tools like the Average True Range (ATR) to set stop losses that adjust to market conditions.
Having these plans in place helps me remove emotions from my investment decisions, ensuring a more disciplined approach.
III. Seek Shelter and Wait It Out
In the wild, if a bear is nearby, finding a safe place to wait until it leaves can be the best strategy.
Likewise, in a bear market, sometimes the best action is inaction.
Holding onto your investments, especially if you have a longer time horizon, and waiting for the market to recover can often be more beneficial than selling at a loss.
Remember, the crypto market typically follows a cycle that lasts about four years.
This cycle includes phases of accumulation, markup, distribution, and markdown, reflecting the natural rise and fall of market sentiment and activity.
So just be patient and trust that the market will rebound at any given time.
IV. Stay Connected with the Community
In the wild, being in a group can provide safety and support when dealing with wildlife.
In the same way, engaging with the crypto community can offer emotional support and valuable insights.
Sharing experiences and strategies with others can help you stay grounded and informed, just like what I’m doing right now.
Exploring online crypto forums, social media groups (though maybe skip Twitter/X for now — it’s been a bit too toxic lately), and local meetups can be great places to connect with fellow crypto enthusiasts.
These connections can provide a sense of camaraderie and help you navigate the ups and downs of the market with a supportive network.
Final Thoughts
Navigating a bear market can be daunting, but by staying calm, being prepared, having a plan, waiting it out, and staying connected, you can protect your investments and stay SANE.
Just like surviving in the wild, it’s all about strategy and composure. Remember, the bear market won’t last forever, and with the right approach, you’ll come out stronger on the other side.
And who knows? You might even find yourself laughing about it later, saying…
Playing Dead Might Prove to be another investment strategy!
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Cheers!🍻
How Do I Stay Sane in a Bear Market was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.
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