Decentralized Finance 2022-2023: Trading and investment strategies for beginners in cryptocurrency and NFTs

By DeFi Media House

It cannot have escaped anyone's attention: the crypto market has taken hard hits. Like any financial market, cryptocurrency trading is led by emotion. 

Or rather, cryptocurrency investors are led by emotion, and the recent volatility in the crypto market is causing a lot of FUD ("Fear, Uncertainty, Doubt"). 

• Language: English
• Publisher: Blockchain Fintech
• Release date: Sep 10, 2022
• ISBN: 9789493298330

Book preview

Decentralized Finance

2022-2023

Trading and investment strategies for beginners in cryptocurrency and NFTs

Edition 3.0

Defi Media House

&

Stellar Moon Publishing

Disclaimer

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Profit from the bear market?

The bear market is often seen as a negative period, where investors mostly see their investment evaporate. Most people buy when the euphoria is highest, which in retrospect are often the least good buying times. This is precisely why the bear market is interesting. The euphoria is gone, but the opportunities are still there!

During this period you have the possibility to invest relatively cheaply and to put your time and energy in interesting developments, which most people are not occupied with at that moment. In this chapter you'll discover everything concerning the bear market, in which I'll take you along to several tips, so that during a bear market you'll be able to take optimal advantage of this difficult period!

What is a bear market?

In the traditional markets, a bear market is said to occur when a drop of 20% occurs. Experienced crypto investors laugh at these percentages, which can sometimes occur daily on the crypto market. A drop of 20% does not even bother many crypto investors, while the stock market, for example, would scream blue murder.

This makes it difficult to give an unequivocal answer to the question. In any case, you can speak of a bear market when the price is in a downward trend for an extended period of time and confidence in the market is very low. This pessimism is caused by the falling prices and the length of the bear market. In general, most investors are pessimistic about the future of crypto, so in this case they are bearish.

Sentiment during a bear market

A bear market is not the most euphoric period of your life. This can be clearly seen in the sentiment in cryptoland, where many investors are withdrawing or expressing themselves negatively via social media. Fear is growing among investors and more and more people are wondering if the market will recover. Out of fear, many investors are stepping out of the market, preferring to sell their crypto at their current loss rather than hold on to the investment any longer.

To take advantage of sentiment, it is useful to note your own emotions somewhere. This applies to the most bullish as well as the most bearish periods. If you later find yourself in a similar situation or recognize similar feelings, you can reflect on this on the basis of your earlier tremors. For example, do you have great fear after the price of Bitcoin capitulates? This has happened many times before, so you can better put the emotions and the price in perspective.

With these tips you will successfully pass the bear market!

During the bear market it is very easy to focus on something else. There are plenty of activities which are adventurous, enthusiastic or exciting during this period. The crypto market, where the prices drop and the mood of many investors drops just as much, is when most people like to spend their time.

To make sure you can hold your own during this period, we have 7 tips that can help you maintain focus during this time. Using different investment strategies, you can discover which strategy is right for you and how to apply it!

1. Make a plan

The following tips contain specific activities which will help you to maximize your profits during a bear market. But the most important is this tip: make sure you always work with a plan. This will make your activities measurable and you'll be able to see how the progress is, and also where you might go wrong. In addition, it also prevents FOMO, because your plan serves as a guide.

In your plan, it is important to explain in detail how you are going to invest and what you will do with the returns. In doing so, it is also important that you think about the time frame. Both for the short and long term a plan is useful, but here a goal is also important. Ultimately, every investor has a motive, which caused that person to start investing.

2. Stopping your coins

It may happen that you missed the boat during a previous bull run and were not able to sell your coins in time for a profit. When the price then makes a big drop, your investment is under water. In the very short term there is little chance that you will make a profit on these coins, but you can use them to expand your portfolio. By discontinuing your coins you ensure that you receive more crypto as a reward. Especially for the less risky crypto assets, like Bitcoin