Crypto Market Seems to Recover - Can You Still Make Profits?

Due to the cryptocurrency market's bearish trend in the last few months coupled with the high risks, many traders decided to sell all their crypto assets and look for alternative investments. However, there are different options for crypto investments in a bear market. A good option is to use auto trading robots. But, you should do research on the best trading robot that suits your needs.

In this article here, we will examine some of the top trading strategies you can use to make money in the cryptocurrency bear market.

The bear market represents an opportunity to buy cryptocurrencies at a low price and hold them in anticipation of market reversal. This strategy is referred to as Dollar Cost Averaging (DCA).

In the case of trading robots, you program the software to keep buying crypto coins at an interval as the prices fall, thus reducing your average purchasing price. The robot will sell at your take profit level whenever the price increases and close the position automatically. It will do the same by stopping loss and starting a new trading cycle.

For example, a trading robot will make an initial purchase at a market price of $100 and open new positions as the value decreases below the entry point. If the cryptocurrency price increases to $105 (take profit point), the robot will automatically close the position and open a new one at $105. As the crypto value falls, it will continue to buy at a reduced price and sell again when it increases to $110, repeating the cycle for each entry point.

However, if managing the risk is your main concern as a beginner, you should find a beginner-friendly crypto trading robot. In this case, we mention Bitcode Prime as the main example for beginners.

Investors in cryptocurrency use staking to generate passive income using tokens. In staking, you guarantee to keep your computer connected to a blockchain platform to validate transactions sharing the same network. So deposit your tokens with a blockchain host as proof of stake (Pos) and validate crypto transactions on the web.

However, not all tokens are accepted in staking, and the different validators will require a specific type for Pos. You will have to stake more tokens to increase the number of transactions validated using your device to earn more. Although the payout varies with different networks, you get paid in tokens, not fiat currency.

Shorting the market is a solid trading strategy when prices take a nose dive. Short selling can be lucrative as you can trade cryptocurrency without owning a coin. In this strategy, you sell first and buy later at a lower price. This differs from the traditional rule of buying low-price assets and selling when they rise. Instead, you borrow crypto while it’s high, sell it and wait for the price to drop even further. Then you buy it at the lower price and return it to your creditor, making the difference.

Futures are a form of derivatives that allow you to borrow assets you intend to sell on a specified date at market price. This reduces the risk of a significant loss as you may choose not to execute the trade if the price goes against the held position. Instead, you only lose the futures purchase fee, which is a smaller amount compared to the asset. However, to trade cryptocurrency futures, you will need blockchain-based DEXs.

Using Decentralized finance (DeFi) platforms for Yield Farming and Liquidity Mining can be a great avenue to earn passive income in a bear market. If you lend digital assets to DeFi, you will earn free crypto tokens in the form of Yield Farming.

By providing liquidity to the platform, you are paid from the firm's operational gains in revenue and interest collected from the platform users. Sometimes the Decentralized finance platforms will reward their Liquidity Provider with free tokens. And through this strategy, you can earn more digital assets in Liquidity Mining.

The bear market can be challenging to navigate, but for those who can hold their naves, it can present great opportunities to make money. What is critical is finding the right trading strategy to help you surf the uncertainty wave and make the best out of it. So if you feel you have the zeal and composure to try the bear market, we hope these alternatives help and wish you luck in your endeavors.