How to Profit during Crypto Bear Market?

By Deya Hroob


bear market



What is a Bear Market?

A bear market is when a stock market experiences a significant downturn over an extended period of time.
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.


btr eft


2.      Then choose EFT on the left.


nft


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 !


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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.

btc daily chart
BTC/USD Daily Chart




btcs3
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.


SAND/USD
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

Register

TerraUSD

%16 APY

Bitrue Exchange

No Lock Up

Register

USDT

%9 APY

Abra Wallet

No Lock Up

Register

 



 

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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