Overnight bear market, here are 6 strategies to deal with losses

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Original article from Duo Nine

Compiled by | Odaily Planet Daily Golem ( @web3_golem )

Overnight bear market, here are 6 strategies to deal with losses

Today, the crypto market suffered another sharp decline, with BTC briefly falling below $54,000 and ETH briefly falling below $2,900. In the past 24 hours, long orders across the entire network were liquidated for nearly $590 million.

It is difficult to predict the future market trend, but we must learn to face losses anyway. Whether you can correctly survive the loss period will determine whether you can become the ultimate winner in the market. Crypto educator and technical analyst Duo Nine shares 6 strategies for dealing with losses for readers reference.

Lock in profits in time

It is not enough to take short-term profits or floating profits, profits must be locked in. If a clear idea is not established, the cryptocurrency casino is likely to take them away immediately.

As shown in the figure below, this user lost $400,000 in one transaction. He started with $500 and earned $400,000 little by little. But he lost all the profits in this one transaction.

Overnight bear market, here are 6 strategies to deal with losses

In addition to the market FOMO factor, every lucky person will eventually run out of luck. You can beat the market a hundred times, but the market only needs to beat you once.

To avoid this, if you are lucky enough to turn $500 into $400,000, your first priority should be to lock in some profits and keep them in cash. You can then continue to trade with a little more money than your principal. Even if you lose your principal due to subsequent market performance, you still have nearly $400,000 in profit. Over time, this will make you a better trader/investor and adjust your mindset and refocus faster after a loss. Only when the strategy achieves good results in the long run can you increase your principal, trading account, or portfolio.

Wait and see the best time to buy

Bear markets are the best opportunities to position, usually when people on social media say Bitcoin is dead, that is the best time to start buying and taking risks. Try to maximize the risk/reward ratio, that is, find high odds bets.

Taking the above example again, under the current market conditions where BTC is weak, I will convert the $400,000 profit into USDC and participate in staking to enjoy passive income.

If we follow the previous guide and calculate at a 29% annual yield, $400,000 can bring about $10,000 per month. Of course, you can also choose a more conservative staking yield, in short, when the market falls further, the yield will still be positive.

Overnight bear market, here are 6 strategies to deal with losses

It is not recommended to buy Bitcoin or any tokens now. If the market continues to fall, I will consider buying the dips at the right time. Remember, you will not lose anything if you don鈥檛 buy, and you still keep the profit of 400,000.

Once the market shows signs of bottoming out, you can buy Bitcoin in batches just like in a bear market. This way, even if BTC continues to fall or go sideways, it will reduce the risk a little bit, and the price of Bitcoin will eventually have a chance to recover and hit new highs. As long as you are patient, a good entry time can easily double that $400,000.

Looking at the current cycle, if you bought Bitcoin at a price below 20,000 in the previous bear market, you would have outperformed the market. But the richer the portfolio, the more BTC you should hold.

Dont trust altcoins

Altcoins are not sound money and are a very poor store of value in the long term. Most chains and applications do not need tokens, at best, they are a nice technology.

A common way to lose money in crypto is to buy the latest altcoin and hold it for the long term. This is like buying tulips and hoping to get rich from it. It doesn鈥檛 work.

Altcoins are good for short- to medium-term speculation, and thats it. Any investment in an altcoin for more than a year is likely to lose money. While there are some exceptions, in general, altcoins are not a ticket to long-term success.

They can make you rich overnight, but they can also go back to zero in no time if you don鈥檛 follow the first point of this article. Most altcoins plummet 90% to 99% in a bear market because of the lack of liquidity. This also means that insiders can easily pump them up, and once they make a profit, no one can stop the price from plummeting. As the most liquid cryptocurrency, Bitcoin does not have this problem.

Fundamentally, only Bitcoin, known as digital gold, is reliable money. Ethereum is more like oil. Its price fluctuates with network usage.

Don鈥檛 bet too much on altcoins, even though they could bring 10x to 100x returns. As you get older and wealthier, it鈥檚 worth reducing your exposure to altcoins and focusing on Bitcoin for the peace of mind you鈥檒l gain.

Don鈥檛 quit your job and trade crypto full-time

95% of traders lose money, and only 5% are winners. Trading cryptocurrencies is harder than working because it is 24/7. It may be a bad decision to trade cryptocurrencies full-time. Instead, it is better to keep your job or find a job you like and invest in cryptocurrencies (mainly Bitcoin).

Actually a good way to avoid losing money in cryptocurrencies is to not trade frequently. Instead we can invest in this emerging industry, when investing is like buying a casino, trading is like playing its games in it, which means we can invest in the infrastructure of the crypto industry from a long-term perspective.

In this sense, Ethereum and its DeFi derivatives are a good example. Although it is difficult to predict, DeFi has made Ethereum what it is today, and Bitcoin is and will continue to be the most reliable currency.

Buying Bitcoin on dips is never a bad option if you want to protect your wealth, buying Bitcoin is not about selling it tomorrow, but about holding it for the long term and retiring.

Say no to greed and get rich slowly

A quick 10x profit on a meme can give you a thrill and allow greed to take over, which will likely lead to a bad trade soon after. Never go all-in on a single altcoin. Feel free to speculate, but keep your positions small.

Making a years salary on a single trade can be life-changing, but so can losing it all on a single trade. Meme coins are attractive because you can get rich (or poor) overnight. They are highly risky and only worthwhile if you participate with a smaller stake.

In this case, it makes sense to take a bigger risk. If you already have a sizable cryptocurrency holding (mostly Bitcoin), then it would be enough to just use a few percentage points of your total assets to speculate in meme coins or similar high-risk coins.

If you make a killing on Meme, sell and never look back and follow the first point of this article. Never sell Bitcoin to buy altcoins, if you find yourself doing this, there is only one reason: greed.

Accept losses and manage risks

Failures and losses are inevitable in this field, but we can mitigate their impact and reduce losses. The market does its thing, and our role is to be a risk manager.

Making money should not be our ultimate goal, instead we should strive to maximize our time and freedom. Bitcoin is the answer, and most people need to lose a lot of money playing altcoins before they realize this.

By accepting losses, we can focus on the important things faster and improve our risk management. The top 5% of traders in this game win because they manage risk well. They may lose often, but in small amounts, and win big a few times a year.

Losses are common, but keep them small enough so that they dont throw you off balance.

Being patient with yourself and finding your own rhythm applies to more than just crypto.

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