Yes, traders use strategies like short selling, yield farming, and buying at lower prices to profit when the market recovers. The same forces that drive prices down can accelerate recoveries once sentiment shifts. Those who use this period to implement solid risk management, diversify thoughtfully, and monitor key indicators will be better positioned when the market eventually turns.
Crypto Bears Beware: The Global Liquidity Cycle Could Be the Longest on Record
However, keep in mind that the crypto market mostly moves in tandem, so you will have to do your research on which cryptos are moving more or less with the market. Give the Dollar Cost Averaging strategy a try with the KuCoin DCA trading bot. The DCA strategy also lets you observe the industry with more of a long-term focus. This strategy allows you to increase your holdings while lowering overall risks during drops.
You can make money in a bear market through short selling, arbitrage trading, staking stablecoins, and investing in DeFi. Buying during a price decline can be a profitable strategy for long-term investors. By reading price patterns, spotting bullish momentum, and recognizing reversal signals, investors can enter the next bull market with confidence and capture the recovery. With a thoughtful approach, it is possible not only to limit losses but also to find profit opportunities, whether it is a bull or bear market. A trend reversal and the end of a crypto bear market are typically accompanied by several signs.
Historical Examples of Crypto Bear Markets
The market resets and prepares for the next breakout—or breakdown. These neutral ifc broker phases, called consolidation or accumulation, come between big trends. History shows those who stayed active during bad cycles came out ahead later down the line. Many crypto traders rotate into Bitcoin, altcoins like Solana, Ethereum, XRP, BNB, or stablecoins during deep corrections.
Of course, it still takes strategy and risk tolerance. Bear markets often clean out hype and make room for the next wave of innovation. Long-term builders keep working, and serious investors look for discounted opportunities. Bears swipe downward—symbolizing falling shakepay review markets. Bulls thrust upward with their horns—symbolizing rising stock prices. But you don’t need to time the market perfectly.
If timing the market is your preferred strategy, you might wish to automate the process. This is the distribution phase, where the buyers and sellers in the market are perceived to be at equilibrium. During the markup phase, new groups of market participants tend to enter the market; and with that generally comes a notable increase in volume at the beginning of this phase. Therefore, no clear trend emerges, and assets typically trade within a tight range. In this phase, the market volume is typically lower than average, as interest in the market remains low.
- As of mid-2025, in the middle of the current bullish trend, Bitcoin seems to have found major support near $60,000.
- These tips can help sharpen your mental resilience while teaching you how to survive crypto bear markets.
- Investors are advised to remain disciplined, monitor macroeconomic triggers, and use bear markets as opportunities to strengthen their portfolios for the next market cycle.
- Such developments could encourage broader participation in the crypto market and help strengthen overall investor sentiment.
- Bitcoin, stablecoin infrastructure, and equity-linked crypto investments stand to gain first if conditions stabilize and investors become more comfortable with risk.
Meanwhile, the “Thrill” period probably happened during the ETF approval earlier in January this year, as there were calls for people to double down on buying BTC. From the look of things, the disbelief stage happened around the first quarter of 2023, when the Bitcoin price began to post gains consistently. There are also phases of thrill, anxiety, euphoria, or complacency. The event, which surprisingly happened before the halving, sent shockwaves around the market. Many cryptocurrencies have struggled since Bitcoin (BTC) hit $73,750 in March. This news article aims to provide accurate, timely information.
- Exchanges can face liquidity issues, hacks, or even bankruptcy during downturns.
- A stop-loss order serves as a safety net for your initial investment, selling off part or all of your position if the price declines or market circumstances worsen.
- All cryptocurrency transactions, once submitted to the blockchain, are final and irreversible.
- Strategies include diversifying your portfolio, using stablecoins, staking, and dollar-cost averaging (DCA) to manage risk.
- The article explains how to spot the start of a crypto winter, why it happens, and how Bitcoin and other coins tend to react to major sell-offs.
- Even though BTC is the primary market mover, it may not have the most explosive price surges.
The 20% drop is your first red flag, but crypto’s natural volatility means you need more confirmation. It’s when crypto values keep sliding downward for weeks, months, or even years. Find out what drives market downturns and when recovery could begin. One commenter pointed out that liquidity growth may be slowing and could peak soon. Traditional warning signs, such as long-term yield curve inversions, have failed to trigger major downturns so far. Central banks use tools such as forward guidance, yield curve control, and closer coordination with governments to reduce the risk of recessions.
Crypto’s 2025 ‘whipsaw’ year drove capitulation as markets look toward a 2026 rebound, Pantera says
Follow influential people in the crypto field and listen to their perspectives. Sometimes, even though you have read and applied extensive advice online, you can still experience failure. We have been specific with previous suggestions on behaving in an unfavorable market. In practice, this would be shorting BTC for the same amount of exposure you have in BTC, meaning that any sharp price decrease will not affect you. If you are interested in short selling, check out KuCoin Futures trading. It’s important to note that shorting is an advanced strategy you should use with caution.
A well-diversified portfolio is an important approach to successful crypto investing. It refers to spending a small, fixed amount of money regularly, which may offer higher profits over time while saving you time and anxiety. DCA is another relatively calm approach to the uncertainties of the market. The believers think crypto is inevitable and will replace the traditional finance sector altogether. It represents the untainted belief in the crypto industry and its underlying technology despite all obstacles it may face. Here are some moves every crypto investor should consider when everything seems in the red.
Bitcoin’s 28%+ correction meets the traditional definition of a bear market, but some experts see a different picture. Assets like Dogecoin and Shiba Inu have lost over 70% of their value, reflecting how quickly risk appetite can disappear in uncertain markets. Bitcoin’s 2025 bear market became apparent after a 28% decline from its January high, dropping from its $109,350 peak to $78,000 by February 2025. Later, when prices are at their lowest, trading volume stabilizes.
Strategies for Bear Markets
In contrast, other experts maintain that the downturn is a bear trap. At present, BTC is already trading under this benchmark. The STH cost basis is an on-chain metric that shows the average price at which recent Bitcoin buyers purchased their coins. An analyst observed that, historically, major downturns often coincide with the Federal Reserve’s rate-cutting cycles. “We are not about to enter another crypto winter, as that implies another spring will soon follow.
Crypto winter is a prolonged bearish period during which prices of most digital assets continue to dip over several months. That is why it is paramount for retail and institutional investors to know how to survive crypto bear markets. HODLers are crypto investors who hold on for dear life despite the volatility and price swings, a bull or a bear market, and the changing narratives. As a result, a crypto bear market is better defined as a prolonged period in which market confidence is low, prices are falling, and supply exceeds demand.
Crypto prices trend up, dips get bought quickly, and trading volumes rise. Historically, the upward trend in bull markets lasts for about 1.5 to 3 years. Crypto bull markets vary but often stretch well beyond a year. It’s marked by steadily rising prices, often across the entire crypto sector.
Alternative stores of value such as gold, the yuan, and crypto also play a growing role in this new, multi-polar system. The global financial system is becoming more fragmented, with countries like China and groups such as BRICS creating liquidity outside the US dollar system. Second, Hughes says global liquidity is no longer controlled mainly by the US Federal Reserve. Instead, he argues it has turned into a “super-cycle” that has been running for about six years and still shows no clear peak as of early 2026.
Most cryptocurrencies lose 50–90% of their value. During this phase, selling pressure is high, confidence drops, and recoveries often fail. Even meme coins and NFTs often pump as risk appetite grows. Capital flows in from both retail and institutional investors. Duration depends on macro factors, halving cycles, and institutional adoption.
This dramatic shift reflected how quickly sentiment can turn in crypto markets. However, some traders view this as an opportunity to buy assets at reduced prices, expecting a future recovery. He notes that assets like small-cap stocks, innovation funds, and Bitcoin approaching all-time highs fit this pattern, suggesting the cycle may still be in its early stages rather than near the end. This constant demand helps absorb liquidity and keeps money flowing into risk assets.
The firm observed that the current downturn’s length now matches previous crypto bear markets. Pantera said the duration of the drawdown in the wider market now mirrors prior crypto bear markets, setting up a potentially more favorable backdrop for 2026 if fundamentals stabilize and okcoin review market breadth returns beyond BTC. While it may not feel like it at the time, bear markets cleanse the system.
This could mean owning crypto investments in addition to stocks, bonds, commodities, etc. Other cryptocurrencies just rally behind it — so far, at least. In fact, many popular coins saw up to 90–95% price drops (compared to their ATHs). Thus, the demand becomes higher than the supply and the price starts increasing.
“Rather than a binary bull or bear outcome, 2026 is shaping up as a period of structural consolidation. Elkaleh told BeInCrypto that the market’s failure to meet bullish expectations in 2025 marks a clear transition from speculative excess to a macro-correlated asset class. Under this model, 2026 would typically signal the beginning of a bear market. Bear markets are an excellent reminder to manage your risk to capitalize on the downturn correctly.