Earning in a Bear Market: 8 Quick Tips

First published
May 12, 2022
Last updated
May 12, 2022

With the price of most cryptocurrencies falling in 2022, there are many questions about how to best navigate this bear market. While it's important to stick to your strategy, you can do a few things right now to make sure you're ready for a market turnaround.

Truth be told, anybody can make money in a bull market! But it takes a real trader to prosper in a bear market. In bear markets, knowledge, discipline, and profits are carved for those who can willingly handle them. Moreover, the market you trade doesn't have to move up in order for you to profit; it merely needs to move. This article looks at the top ways you can earn in a crypto bear market. 

What is a Crypto Bear Market?

A crypto bear market is when the prices of cryptocurrencies decline by more than 20%. It is often accompanied by negative investor sentiment. Simply put, when the prices of cryptocurrencies fall significantly for a cycle or long-term duration then it is considered a crypto bear market. 

How to Earn in a Bear Market? 

Historically, we have known that the crypto market tends to fluctuate due to its volatile nature. While this may cause some investors to panic, there are ways in which you can make profits when the market is in bad shape. Ahead, we discuss the top tips for handling your crypto portfolio in the bear market. 

1. Crypto Scalping

Crypto scalping is the process of taking advantage of minute changes in the price of a cryptocurrency. It's not about trading; it's about making small profits regularly. This strategy is excellent for beginners because it doesn't require you to have a high-risk tolerance or a large amount of capital.

Cryptocurrency scalping can be done on any exchange that offers API access for automated trading bots. But if you're looking to make small profits quickly, cryptocurrency scalping may be worth your time!

While starting scalp trading, investors usually start with a lower percentage range of 5% to 10% to avoid risk. This protects the capital from declining significantly in unfavorable situations.  

2. Opt for an ICO Investment

Let’s say you have already gained some experience investing in cryptocurrencies. In that case, you will not be surprised to learn that the first step toward investing in an Initial Coin Offering (ICO) begins with researching your options. Scour the internet for cryptocurrency forums and groups as well as popular social media sites like Facebook and Reddit. See what ICOs are buzzing around the crypto sphere. 

Wondering how to earn in bear market? Accumulate a list of ICOs that interest you or were mentioned several times on multiple venues. Investigate companies behind each ICO by typing each one into Google and CoinMarketCap to uncover information about their development teams, whitepapers, and other news regarding the project. 

Once you have taken notes on all this information, rate each ICO from 1 to 10. Remember, investing in an ICO is a risky business. Doing your due diligence and performing proper research can substantially lower that risk and increase your chances of selecting a winning investment opportunity.

3. Take up Freelance Crypto Jobs

If you’re investing in cryptocurrency but aren’t seeing profits, maybe it’s time to look into another way of making money. One option is to get paid for freelance work in cryptocurrency. Some employers are willing to pay their employees in crypto. This can be an excellent option for you as you will get more profit from the same job you would get paid for in traditional currencies.

Freelance cryptocurrency jobs are projects that you bid on and complete for clients. These clients can be individuals, companies, or other freelancers themselves. They may ask you to write a blog post or design a website. They may ask you to create a digital currency wallet or manage their social media accounts.

If you win the bid, the client will pay in cryptocurrency (the most popular being Bitcoin) through an escrow service. It’s important that both parties trust each other because cryptocurrencies are not reversible payments—once they’re gone, they’re gone forever! So make sure that both sides are clear on what they want before starting work together. 

4. Don’t Panic Sell

First of all, don’t panic. I know that when your portfolio goes red, you want to sell everything immediately. However, if you hold on to your assets and don't really sell anything, you have not really made a loss. Whenever you invest in the crypto market, make sure that you decide how much you are really willing to lose on a given trade. 

Also, remember why you invested in cryptocurrency in the first place. The Crypto market is extremely volatile. After a sudden drop, the price can rise again very quickly. So wait for that moment before selling or swapping your tokens for another token that is trading in an upward trend. This way, you can recover the amount you have lost. 

5. Leverage Indicators to Find the Best Entry Point

You can also learn about indicators and try them for yourself. If you are starting out, technical analysis will help you understand how the market moves. There is no foolproof indicator, but they give you strong signals about buying or selling. 

One popular indicator is the relative strength index or rsi. It measures momentum and has two lines oscillating in and out of a centerline. When the indicator line crosses above the channel, the market is overbought; when it crosses beneath the channel, the market is oversold. 

These two signals provide you with a good idea about what to expect from the market, but a single indicator never gives you accurate information. That’s why you need to use different indicators, and only then should you make a decision. A good step would be to start learning technical analysis, trading strategies, and how to use different indicators.

6. Consider Buying the Dip 

In the crypto market, a saying states, “buying the dip.” This means to buy when the price of a coin drops and then sell when it rises again. Although this strategy might be profitable in theory, beginners tend to have trouble executing it. The market tends to fluctuate rapidly, and sometimes you might find yourself buying dips at too high a price. 

Instead of using this strategy, beginners should dollar-cost average (DCA). When looking to earn in bear market, DCA is an effective strategy. DCA involves breaking up your investment funds into several smaller amounts and trading with only a fraction of your total funds. 

For example, if you have $1000 to invest, you should break that amount into smaller chunks of $200 or $100 each. Then you place your trades using those smaller amounts.

7. Put Your Money into Different Crypto Assets

It is challenging to know which of the 18000+ cryptocurrencies will rise in value or go on to rally the highest. One way to hedge your bets is to invest in different crypto assets. This would mean reducing your smaller trade sizes, but you will also reduce your overall risk. You will first want to perform rigorous due diligence on each crypto asset you intend to buy. 

It's often a good idea to trade an asset that has recently performed well. Look at the asset's price history using tools and see how well it has recovered during previous crashes. Does it correlate strongly with the rest of the market, or does it regularly outperform other leading assets? Previous performance is no guarantee of future price activity, but it gives you a rough idea of what might be possible.

8. Earn Interest on Your Crypto

If you are looking for an easy way to make profits even in the crypto bear market, consider depositing your coins with an interest-earning platform like Hodlnaut. There are several ways in which you can continue earning crypto with Hodlnaut

For instance, with Hodlnaut Interest Account, you can deposit eight coins, namely BTC, ETH, DAI, USDT, USDC, WBTC, UST, and LUNA, and earn up to 13.86% APY. It is a convenient way of putting your crypto to use to earn passive income. What’s more? You can choose the cryptocurrency you want to earn interest with Hodlnaut’s Preferred Interest Payout feature. If you feel like you want to swap tokens within the platform, that too can be easily done with the Token Swap feature of Hodlnaut. 

Speaking of earning during the bear market, look at Hodlnaut’s User Referral Program. Every friend who signs up with your referral link, deposits USD 1,000 worth of any asset, and holds it for 31 consecutive days; you both will receive 30 USDC each. 

Final Take

I hope this article helped you learn how to earn in the crypto bear market. As a beginner, learn about different trading strategies, diversify your portfolio, and be aware of different crypto projects. That way, you can invest your money at the right time to make profits. Many of these tips can help you profit during bearish days, but you now have a foolproof bag of tricks to keep going, no matter the state of the market.

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