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Arnaud Deblander
Jul 1, 2022 8:00 AM

How to trade your way out of the crypto bear market?

At the time of writing this BTC is trading just above the $19,000 level, which is a rather critical threshold.

Is everything gloomy and doom during this time of bear market? Can you find opportunities and trade your way out of it? The answer is yes" and we will analyze why in this blog.

BTC Analysis as of 1st July 2022, Thursday

At first glance, even from an uninformed observer's perspective, one can see that the BTC chart is very negative. Prices are resting on an extremely important support zone at $19,300 and if this were to break, there would be no real obstacle for the king of crypto to dip further down south, towards the $13,000 area.

Given the fundamental state of the market, there is little chance that the current area will hold and more downside movement is expected. From a technical indicator perspective, both on a weekly and 3-day time frame, the WaveTrend trades near their oversold area, which traditionally is an excellent place for a bounce.

The situation is therefore paradoxical with a completely frightening market sentiment on top of an accumulation of bad news. If we look at the Fear and Greed Index, it is in "extreme fear" at 11. However, do note that the best opportunities often appear when desperation is at its peak.

The question is whether we have already bottomed out during this bear market and we would say no, we have not yet bottomed out. We still need one more capitulation for the market to be ready to rebound. This could happen around the $12 to $13k zone but it's not impossible to wick at $7k before moving back up.

Can we trade in a bear market? If yes, how?

Of course, we can trade in a bear market and for that, there are two solutions: Manual trading or Automated Algorithmic trading.

Manual Trading

For experienced traders and investors, manual trading is naturally what comes to mind first. It is not necessarily recommended for everyone because it requires long training and practice. In order to take advantage of the bear market by trading manually, you will first have to master some basic principles of technical analysis.

The simplest concept but also one of the most important being “Supports and Resistances”. As a rule of thumb, one will try to buy an asset when it is just above a support level and sell it when it is below a resistance level. Pretty simple, right? So in theory it's safe, in practice it's a little different.

Indeed, the way you approach trading on support and resistance will differ depending on how you invest. If you are more of a short-term investor, then it may be wise to buy the first test of support and take your profits near an average resistance level.

If you are more of an investor, you have two choices depending on your skill level. If you have been in the markets for a long time and have mastered the subject, you can try to stall,  wait for confirmation and enter in one go or so.

If on the other hand, you are a beginner, it will be preferable to use another strategy, the "Dollar Cost Averaging" which consists of dividing your capital into several entry points throughout the bear market and thus reducing your average entry cost.

Automatic Trading

The other solution to continue trading during a bear market is the use of crypto trading bots. For this, you have several options available to you as well. If you have the time and skills, you can create a trading algorithm by yourself.

If not, you can turn to automated trading platforms like SuperBots. SuperBots works with vaults, which are powered by smart contracts that take care of everything, once you have added your funds to the vaults. To do so, you just have to connect a wallet, Metamask for example, and deposit your funds on the smart contracts. Each vault only trades on one pair of crypto, like WBNB and BUSD or WETH and BUSD. If you choose our best-performing vault, WT BNB V2, you can deposit either BUSD or WBNB on it and start trading.

SuperBots offer up to 9 vaults, with a different strategy on each which allows you to diversify even more your portfolio. These strategies have been live tested for years now and the 4 best vaults totaling around +80% during the last 2 months (May and June) which makes them a very good way to hedge against the bear market. They obviously work as well during the bull market but we are far from that for now, right?

The four best performing vaults thus far are WT BNB V2, Ultimate Scalper, Moon Rocket BNB, and Moon Rocket ETH. Wonder how to pick the vaults or bots of your choice?

In addition, SuperBots is currently developing a new product, the Super-Vaults, which will automatically rebalance your capital into the top 5 best performing vaults each week, saving you the hassle of

Conclusion

In conclusion, just because the bear market is here, it doesn’t mean you have to exit from crypto entirely. Neither is Dollar Cost Averaging (DCA) your only way out. Understand that this is a cycle and crypto must be viewed as a long-term play. The key is to find great opportunities to help you ride through this crunch time and SuperBots, with its proven winning performance (even when the crypto market crashed), is a good solution!

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Tags

  • how to trade
  • crypto
  • bear market