How to Profit during Crypto Bear Market?
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What is a
Bear Market?
There are 3 ways to trade a bear market such as Trading Leveraged Tokens , Staking and finally Trading Perpetual Futures
Trading Leveraged Tokens
What is Leveraged Tokens?
Leveraged tokens are based on the value of an
underlying currency, such as BTC, but they are not strictly a currency
themselves. Instead they are managed funds that multiply the profit or loss by
a set value. For example, if the price of BTC rises by 5% and you are holding
the BTC3L asset, your profit will be multiplied by 3, and it will be
like BTC went up by 15% instead.
On the other hand, if the price of BTC declines
by 5% and you are holding the BTC3S asset, your profit will be
multiplied by 3, since BTC3L : represent
long positions and BTC3S : represent short positions
Unlike high risk divertivies trading as they
are monitored constantly, there is almost 0 risk of liquidation! There is only
a small management fee of 0.1%, taken from your position once per day.
On the downside, their value erodes over time
when there is volatility on the underlying asset. As such, they are suitable
for short term investments and will depreciate to almost 0 if held
for a long time.
Where to
Trade Leveraged Tokens?
The best place to trade leveraged tokens is
Bitrue Exchange where you can find several
tokens to choose from.
Steps To Trade Leveraged Tokens on Bitrue Exchange
1. Go to Exchange button on the top corner.
2. Then choose EFT on the left.
3. Choose the pair you want to trade. Remember :
BTC3L: Is 3x long BTC. When the price of the underlying asset increases by
1%, the net value of the product will increase by 3%.
BTC3S: Short BTC 3x. When the underlying asset drops by 1%, the net value of
the product will increase by 3%.
That's it , you're done !
How Can You Buy and Stake Shiba Inu Coin?
How to Use Leveraged Tokens to Profit in Bear Market?
As stated above, when
you choose any pair with ends in ( S ) , that means you open short position
on this pair. That's also means, when the underlying asset drops, you get
profits.
Let's take
a real example:
The underlying asset BTC/USD
daily chart shows that the pair have dropped more than %12. However, when we
look at leveraged token BTC3S , the token has skyrocketed more than %50.
The token has rose from $0.054 to $0.090.
Thus, if you had bought
BTC3S in the above example, you would have been in profit.
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| BTC/USD Daily Chart |
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| BTC3S Token |
Let's take
another example:
The underlying asset SAND/USD
daily chart shows that the pair have fallen more than %50. In the contrary,
when we look at the leveraged token SAND3S , the token has surged more
than %100. The token has rose from $2.95 to nearly $10.00.
Thus, if you had bought
SAND3S in the above example, you would have profited much.
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| SAND/USDT Daily Chart |
Staking Coins
What is Staking ?
Staking is a process in
which you use your coins to verify transactions on the network, as oppose to
Hashing. However, Staking is now used to describe the process of holding coins
in a wallet and collecting rewards according to how much you have. The more
coins you have staked, the more rewards you receive, which can be used as an
incentive for keeping your wallet open. And since this is an easy way to make
money while doing nothing at all, many people choose this option as their
primary source of passive income.
You can choose from
many coins in the market to stake. Most wallets and centralized exchanges offer
Staking option for their customers.
In bear market or when
there is a dip in the market , it's a great idea to use staking, since you gain
profit for doing nothing. You can accumulate your rewards till the market is
going up again.
However, even if you
gain rewards when you stake a coin in a bear market, there is a risk that your coin plummets
sharply, therefore , you will not notice your profit. You have to wait the
market to turn its course upward.
Because of that, we recommend staking USDT or any stablecoin
in bear market , because you avoid the risk that your funds decrease in value.
There are many places
where they offer you good APY when you stake Stablecoins.
|
USDT |
%22 APY |
Bitrue Exchange |
30 Day Lock-Up |
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|
TerraUSD |
%16 APY |
Bitrue Exchange |
No Lock Up |
|
|
USDT |
%9 APY |
Abra Wallet |
No Lock Up |
Trade Perpetual Futures
Futures trading is very risky. We do not recommend it ,
because it can liquidate your funds. So please use an amount of funds that you
are willing to lose.
Unlike regular spot trading, with perpetual contracts you can
either buy long or sell short.
When you think there's going to be a dip in the market, you
take a 'short' or a 'sell' position; if you think the market is
going to go up, you take a 'long' or a 'buy' position.
Buying long means that you believe the value of the asset
that you are buying is going to rise over time, and you will profit from this
rise with your leverage acting as a multiple on this profit. Conversely, you
will lose money if the asset falls in value, again multiplied by the leverage.
Buying short is the opposite - you
believe that the value of this asset will fall over time. You will profit when
the value falls, and lose money when the value increases.
Perpetual contracts allow you to multiply the profits and
losses on your positions through a system known as leverage. For example, if
you select a leverage multiple of 5x and the value of your underlying asset
rises by $1, you will make $1 * 5 = $5.
On the contrary, if the underlying asset falls
by $1 you will lose $5.
So, in bear market just open short positions to profit from declining market.
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