Throughout early May 2022, the crypto market continued to be depressed and tended to be bearish. This was exacerbated by the drama of the stablecoin Terra USD (UST) which added to investors’ panic about the future of crypto investment going forward.
In the midst of this volatile situation, what can investors do to deal with a bear market?
Here’s the Tips Crypto Investment When the Market Is Bearish
Understand the risks before investing
It is important to understand what investors are dealing with before investing in crypto assets. First, the cryptographic nature of the blockchain must be understood by every investor. Investors should understand how transactions are recorded in a distributed database, and how different blockchains support different crypto coins.
“For example, in the case of the recent UST crash , stablecoins should have remained stable, even if the crypto market fluctuated. Don’t be surprised if you see the value of crypto go up or down by a significant margin, because this market is still new with all its innovations
Long term focus
It is difficult to predict market conditions when in a bear market condition. It’s best not to invest when you just want to focus on getting rich quick. Focus on a long-term approach to investing and assume that any asset purchased today will continue to be held for several years to come.
Buy the dip strategy when the price is down
The most common thing in trading crypto assets is to take advantage of low prices as a good entry point in a bear market. The hope is that investors will still be able to benefit when prices recover. However, keep learning the technical analysis of each selected crypto asset.
Diversify your portfolio
Using the term putting all the eggs in one basket, is not the right strategy in the crypto world. It is better to divide the investable income into different assets.
Use funds that investors can afford. If buying any crypto, start small. Invest only money that will not change or harm your lifestyle in any way.
Invest in stablecoins
Despite the negative sentiment from UST, stablecoins are still a relatively safe portfolio during bear market conditions. Before choosing an investment in a stablecoin, do your research first, because there are many types with different asset backing, some are backed by fiat money, crypto assets and commodities, such as gold. All have advantages and disadvantages of each.
Disclaimer : Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. Liputan6.com is not responsible for profits and losses arising from investment decisions.